Cabinet Office data reveals dip in receipts from government land disposals
Question mark over £5bn 2020 target as 2016-17 sales bring in just £601m
The Old War Office in Whitehall - sold for £357m in 2015 Credit: EPR Architects
Just-published Cabinet Office transparency data on central government land disposals shows a 44% year-on-year drop in receipts, a fall that calls into question departments’ ability to hit a longstanding target of raising £5bn from property sales by 2020.
Departments sold off 535 sites in 2015-16, netting £1.064bn towards the target. Among the big ticket sales contributing to that figure were £357m raised by the Ministry of Defence from the sale of the Old War Office in Whitehall, earmarked for conversion into a luxury hotel, and £65.5m generated by the Cabinet Office’s sale of Admiralty Arch.
But while the land-disposal figures for 2016-17 reveal a broadly comparable number of sites sold off – a total of 522 – receipts were significantly lower at just £601m. The Cabinet Office confirmed to CSW that the two years' combined figures, rounded up to £1.66bn, were the total domestic contribution so far to the £5bn target, although overseas land disposals by the Foreign and Commonwealth Office and the Ministry of Defence raised a further £75.8m over the same period.
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The running tally towards the £5bn target means departments will have to generate an average of £815m a year from land disposals to meet the commitment by the 2020-2021 financial year, or £1.087bn a year to hit it by 2019-20.
Selling off public sector land to help the nation's finances and provide sites for new homes and businesses has been a high-profile strand of government policy since 2010. However in 2015, both public spending watchdog the National Audit Office and MPs on parliament’s Public Accounts Committee questioned the coalition government’s record of delivering on its pledges – particularly in relation to monitoring the actual number of homes built on sold-off land. The original target had been 100,000 homes over the course of the parliament.
The Cabinet Office’s latest data release said government land sales generated £1.8bn between 2010 and 2015, and confirmed the target of garnering a further figure of “at least £5bn” by 2020 – an amount outlined in 2014’s Government Estate Strategy.
“The disposal of surplus government-owned property is an important part of the government’s drive to improve its estate management and create an efficient, fit-for-purpose and sustainable estate that meets future needs,” it said.
“This means disposing of surplus land and buildings in a way that delivers value for the taxpayer, boosts growth and delivers new homes. The government has committed to freeing up land with capacity for at least 160,000 homes by 2020 and raising at least £5bn billion from land and property disposals by 2020.”
Among the 2016-17 financial year’s biggest ticket sales were £31m generated by the Department of Health’s sale of Frenchay Hospital site near Bristol and the then-Department for Communities and Local Government’s disposal of the 15 hectare Louisburg Barracks site in Hampshire for £22.6m.
DH – now the Department of Health and Social Care – accounted for the biggest slice of domestic sales over the two financial years, generating receipts worth £439m. The MoD was in second place with £437.1m – the bulk of which was accounted for by the sale of the Old War Office.
DCLG, renamed the Ministry for Housing Communities and Local Government in January this year, was in third place, with disposals worth £378.3m over the two years. The Department for Transport generated £202m.
Ministry of Justice disposals brought in £42.8m between 2015 and 2017 from the sale of courts and other sites, and a further £7.9m from overage rights. HMP Bullwood Hall in Essex was its biggest single-ticket item, garnering £4.8m.
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