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Government needs to learn from its mistakes, says Public Accounts Committee

Words: Laura Edgar

Government ministers should be "embarrassed" by the findings discovered in a new Public Accounts Committee (PAC) report, says Labour MP Meg Hillier.

In the report, entitled Disposal of public land for new homes (PDF), the PAC says that the Department for Communities and Local Government (DCLG) cannot demonstrate the success of the land disposal programme. The DCLG, claims the PAC, "does not collect information on the actual number of houses built or under construction, the proceeds from land” or whether land was sold at market value.

In the last parliament, housing minister Brandon Lewis said that the government planned to “release enough public land to build as many as 100,000 new, much-needed homes” by 2015. By March 2015, government data shows it had disposed of enough land for 109,950 homes. The government now aims to release public land for up to 150,000 homes between 2015 and 2020.

The DCLG focused on “a notional number” for potential capacity for building on the land sold by individual departments in order to determine success, according to the report.

Hillier said the entire approach has been “wishful thinking dressed up as public policy”.

It 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,” Hillier said.

The government “needs to learn from its mistakes", she added.

In response to its findings, the committee set out several recommendations, including:

  • The DCLG and the Homes and Communities Agency must apply a broader test of value for money, which must include sale proceeds and progress in the actual construction of homes.

  • The department will be held to account for the value for money of the new programme. It should set out how it will gain assurance that all land-owning departments and public bodies have achieved value for money from all disposals.

  • Taking forward its target, the government must only count the number of homes built, or started, on land disposed of.

A DCLG spokesman said: “Previous governments allowed valuable brownfield land to go unused whilst housebuilding levels crashed to their lowest levels since the 1920s.

“We have got the country building again and are releasing surplus government land to protect taxpayers from paying for their upkeep and build the homes families need."

Following the release of the report, two property consultants have said public land should be used to generate income for councils.

Charles Mills, partner at Daniel Watney, said that although it is important that government departments are held to account, the PAC is too focused on money. “It’s not solely about capital receipts but also about actually bringing land forward and actual delivery. The most practical way to do this is to use a number of developer partners on large sites. In other cases we’ve seen councils sitting on their hands and refusing to help improve the supply of land. This must change.”

Martin Bellinger, chief operating officer at Essential Living, said: “Defining ‘best value’ solely by the size of a capital receipt can be misleading, not least because many councils would be better off increasing their long-term income rather than selling off the family silverware altogether.”

Instead, he suggested, building homes for rent using public land or buildings and sharing the profits with councils is “one real solution that more authorities should consider”.