The Public Accounts Committee (PAC) have published their damning report on the disposal of public land for new homes — its second report of 2015-16…

According to Meg Hillier MP, Chair of the Committee of Public Accounts:

“The Government should be embarrassed by the failings uncovered by the PAC’s inquiry into land disposal. Its entire approach has been wishful thinking dressed up as public policy. It also demonstrates an alarming complacency over the future of an irreplaceable public asset. Many thousands of people desperately need homes and an effective land disposal programme should provide two significant benefits: much-needed housing and much-needed cash for the public purse.

“Yet the Government has no record of how many homes have been built or are under construction. It has no record of sale proceeds, nor their value in relation to prevailing market prices. There is no means of knowing whether taxpayers are getting a good deal from the sale of their land. We are told enough public space has now been sold off to accommodate more than 100,000 homes at nearly 950 sites. Land disposed of by the Ministry of Defence alone could hold an estimated 39,000 properties.

“The Government cannot tell us how many of these homes now exist – or will ever exist. Instead it appears simply to have hoped huge numbers of houses would spring up across the country. Government departments have been instructed to draw up plans for further spending cuts and many people are rightly worried about the effects these will have on struggling public services.

“It is an insult to taxpayers that the potential economic benefits arising from the sale of public land should be put at risk by such short-sighted Government mismanagement. With the next housing target already announced the Government needs to learn from its mistakes.”

Potential for new homes

In June 2011, the Housing Minister announced that government planned to “release enough public land to build as many as 100,000 new, much-needed, homes and support as many as 25,000 jobs by 2015”. The Department for Communities and Local Government (DCLG) holds policy responsibility for the target as a whole, with individual government departments responsible for identifying surplus land, estimating the number of potential dwellings, and disposing of the land.

The Homes and Communities Agency was responsible for collating and reporting data to monitoring boards, and also acted as the property disposal agent for the Department itself. The Department’s data shows that, by the end of March 2015, government had disposed of land with capacity for an estimated 109,950 homes, across 942 sites.

The biggest contributors were the Ministry of Defence (around 39,000 homes), the Homes and Communities Agency (around 21,000, on behalf of the DCLG) and the Department of Health (around 15,000).

No proof of success

The DCLG cannot demonstrate the success of the land disposal programme in addressing the housing shortage or achieving value for money because it does not collect information on the actual number of houses built or under construction, the proceeds from land sold, or whether the parcels of land were sold at market value. Instead, it chose to focus only on a notional number for ‘potential’ capacity for building houses on the land sold by individual departments in order to determine ‘success’.

The Department also counted towards the programme’s target the capacity of land sold before the programme had even started. It did not collect basic information necessary to oversee the programme effectively and, where it did collect programme-level data, there were omissions and inconsistencies.

With much greater ambitions for land disposals in the new Parliament, the Department must address the weaknesses in the current programme, and the Department has accepted that it needs to improve its general monitoring.

If it is to oversee the new programme effectively then this must specifically include tracking sale proceeds and progress with the actual construction of new homes, and overseeing the programme in a way that gives Parliament and the taxpayer much greater assurance over the value for money achieved from all disposals.

The full report can be viewed here: http://www.publications.parliament.uk/pa/cm201516/cmselect/cmpubacc/289/28902.htm