Disposal of public land for new homes

24 June 2015

The National Audit Office has published the findings from its investigation into the previous Government’s progress in meeting its target “to release enough land to build as many as 100,000 new, much-needed, homes and support as many as 25,000 jobs by 2015”.

The key findings of the investigation are as follows.

  • The target measured a notional number of expected homes, not actual homes built.
  • The NAO found no supporting documentation or economic evidence behind the target or how it was allocated to departments.
  • Departmental progress in disposing of land was slower than expected and government had to take action to increase land sales. It closely monitored progress and took various approaches to increase delivery, such as transferring land to the Homes and Communities Agency (HCA) for disposal, increasing central support for difficult sites and providing financial assistance to departments to help with the cost of preparing sites.
  • By the end of March 2015, government had disposed of enough land with capacity for an expected 109,590 homes. In total, the land disposed of comprised 942 sites.
  • The Department for Communities and Local Government applied a wide interpretation of the land that could be counted towards the target. The total notional 109,590 homes figure included 15,740 homes on land that the public sector disposed of before the target was set. Land sold for the 15,740 homes was counted because it was expected to be built on during the programme however this is inconsistent with the scoring of land sold during the course of the programme, where homes will be built long after the programme closed in March 2015. And, in addition, surplus land was categorized as sold when the organization owning the sites moved outside the public sector even if the sites were not developed : e.g. sites owned by Royal Mail (2,584 homes) and British Waterways (8,199 homes).
  • Government recognized that disposal of surplus land, at an accelerated rate, would not necessarily lead to increased home building. Departments used a range of disposal methods and partnering approaches with developers with the aim of ensuring homes were built and profits shared.
  • Departments do not routinely monitor what happens to a site after disposal so there is no information on how many homes have been built on sold land. The NAO is unable to report the actual number of homes built to date as the information is not collected.
  • The DCLG does not collect information on the amount of money raised from the sales. Without data on the number of homes or sales proceeds, it is difficult to assess if departments obtained good value from their disposals and, more broadly, if government secured value for money from the programme as a whole.

There is a new process for land disposals from 2015-16 with new targets for central government and associated bodies to deliver at least £5 billion of land and property sales between 2015 and 2020 and an ambition to release land for up to 150,000 homes in the same period.

In taking forward this new target, the DCLG and the Homes and Community Agency should review and share the lessons from this programme, including the need for the Department to clarify how it intends to measure progress through sales proceeds or number of potential homes; and for someone to take responsibility for monitoring what happens to land after disposal within the target period.

Notes for Editors

  1. This report is a National Audit Office Investigation. The NAO conducts investigations to establish the underlying facts in circumstances where concerns have been raised with us, or in response to intelligence that we have gathered through our wider work.
  2. The report includes case studies on a selection of sites at Aldershot, Bicester, Birmingham, Derby, London and Northampton.
  3. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained by using the relevant links on our website.
  4. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 810 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of £1.15 billion in 2014.

Contact

Steve Luxford
Direct line: 020 7798 7861 Mobile: 07985 260074 Email: pressoffice@nao.gsi.gov.uk

PN: 31/15