The government owns far too much land. It must sell a lot off

 
Allister Heath

SELL, sell, sell – or so we must hope. With a bit of luck, the government is finally about to kick-start a massive and long-overdue sell-off of its vast estate. All of central government’s land and property holdings – worth £330bn – will soon be available for perusal on a Rightmove-style website. Individuals and companies will be encouraged to apply to buy assets that they believe they could make more use of than the public sector currently does. If all goes according to plan, this could herald an astonishing cultural and market revolution and pave the way for tens of thousands of new homes; it would also be a remarkable example of big data and open government.

Of course, the likes of 10 Downing Street or the Houses of Parliament will not be sold off, and neither will necessary military installations. But there is plenty of land and property that the government already wants to get rid of – and it hopes that people trawling through its new website, many with local or specialist knowledge, will be able to find a lot more obscure state assets that could be viably redeveloped. Applicants will need to say why they believe the site is potentially surplus, and only if the location is vital for operational use or there are other overriding reasons will it not be released to the open market, according to the Treasury. Crucially, this will apply to land and property that is both vacant and occupied.

The government has been trying to sell off land that is surplus to requirements for a while; but the process has so far failed lamentably, bogged down by institutional foot-dragging from departments, civil servants and entrenched interests. The relaunched process will now see applications – we are promised a very simple online form – go before a committee comprising ministers from the Treasury, Cabinet Office and the landholding department. Crucially, cases will not be left solely to individual departments to consider; in the past this led to them blocking all attempts at slimming-down. The Department for Communities and Local Government will still receive applications challenging local authorities’ use of land and property, another important area which has so far not yielded anything like enough disposals.

The government is sitting on a huge amount of under-used assets; disposals will also raise much-needed cash for the Exchequer. This will prove especially important for housing: the government owns lots of brownfield land with development rights, or which could relatively easily be granted building permission. Given that the government has failed to genuinely liberalise the planning process, and is very reluctant to release greenfield land or to create any more new towns outside of London to cater to the UK’s soaring population, its last hope of reviving the moribund housebuilding market – and eventually to reduce the cost of housing – is by making available a lot more ex-public sector land.

The government’s announcement comes as Britain’s housing crisis continues to intensify. Research from LV, the insurers, shows that the floor area of the average family home has shrunk by two square metres over the past 10 years. Today’s average family home is just 96.8 square metres compared to 98.8 in 2003. That is the problem when measuring housebuilding in terms of “units”, the government’s current target: ludicrously, this suggests that a tiny studio flat is equivalent to a six-bedroom detached house and thus incentivises the authorities to focus on tiny properties to inflate the statistics.

Let us hope that this latest initiative, rather than being yet another useless gimmick, actually leads to real change and to a historic transfer of assets to the private sector. We shall soon find out whether this government is able to railroad reform when it really wants to, or whether it is powerless in the face of bureaucratic opposition.

allister.heath@cityam.com
Follow me on Twitter: @allisterheath

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