Disposal of public land for new homes Contents

2 Oversight of the programme

18.From the start of the programme, disposals were slower than forecast and Ministers were concerned that that the 100,000 target would not be reached. The Department told us that it had acted quickly in response to the slow start, including setting up its own review and obtaining expert advice. It also told us that its officials worked alongside the Cabinet Office Implementation Unit, which carried out a review in 2012.23 The Cabinet Office review highlighted some significant concerns about meeting the target, including, for example: dependence on departments selling 20 sites each with capacity for over 1,000 potential homes; limited departmental capacity, lacking the necessary expertise and resources to focus on disposal of land, which was not a core or priority activity; and no collective responsibility amongst departments for the overall target.24

19.The Department told us it had acted on all of the Cabinet Office’s recommendations. Actions taken to increase land sales (which are set out more fully in Figure 7 of the NAO’s report) included: asking departments to bring forward sites planned for disposal in 2015-16; transferring land from other departments and public bodies to the Homes and Communities Agency for it to handle disposal; increased ministerial attention and engagement; and a £190 million investment fund which departments could use for site remediation and other works. The Department also told us about other work done to support departments, including having the Homes and Communities Agency run workshops in individual departments, and seconding staff into some key departments.25

20.On providing guidance to individual departments on the sale of assets, the Department told us that there was lots of guidance available to them, that ‘Managing Public Money’ was the ‘bible’ for these purposes, and that it was supplemented by specific guidance on some of the more difficult transactions. However, when we drew the Department’s attention to the Guide for the Disposal of Surplus Property, published in 2005 but which we had confirmed was still current government advice, the Department was not aware of it.26

21.When the NAO reviewed supporting documentation for the programme, it found that landowning departments were only able to supply full supporting documents for 21% of disposals, based on its sample of 127 sites. In 35% of cases examined the NAO also found differences between the number of potential homes in the Homes and Communities Agency’s programme level data and the number of potential homes in the individual department’s information. The Department claimed it had addressed the findings of the Growth and Implementation Committee’s report, despite the NAO’s report echoing concerns about the quality of data raised by that Committee’s data validation exercise in early 2013.27

22.In Part 1 of this report we set out that, during the programme, the Department did not collect information at a programme level on the number of homes actually built or under construction, focusing instead on the potential capacity of the land disposed. The Department had argued that the number of homes built was not relevant to judging the success of the programme, and that it would have been too much of a burden on private sector developers for it to collect this information. However, in preparation for being questioned at our evidence session the Department told us it had indeed gone back and checked on progress on some sites. It told us that it knew of example sites where houses were being built, including 142 homes under construction at Rathbone Place (an old Royal Mail site). The Homes and Communities Agency told us that, out of its 20,930 contribution to the overall housing capacity of land sold under the programme, construction had started on around 6,200 homes, and around 2,000 had been completed.28

23.The Department also accepted that it had not taken a programme level view of, for example, what would be a reasonable level of proceeds for the taxpayer to expect from the programme. It had therefore not collected information on sales proceeds–“We did not ever seek to do that kind of programme-level understanding of the overall sales”. It said that figures for sales proceeds were not necessarily straightforward because “sometimes it is quite complicated because of the nature of the different ways in which the land is released”. But it did “absolutely accept that this is something that we need to improve on in the next programme, and we will.”29

24.Besides the number of homes built and the sales proceeds, notable information on the disposals that was not collected centrally included: the value of the disposed land as recorded in individual departmental accounts; the means by which sites were sold; and copies of the contracts.30 Furthermore, the individual departments themselves could not, in some cases, produce important information for the NAO about the sales of public assets. For example: there was no copy of the sale contract available for the Defra/British Waterways site at Wood Wharf, London; in other cases details including sales proceeds were not supplied due to ‘commercial confidentiality’; and the NAO could not obtain some details of the Department for Transport’s disposal of its Nuneaton site.31 The Department accepted that it absolutely needed to address shortcomings in the records kept by individual departments.32

25.The Department is now responsible for overseeing a new programme of land disposals. The 2013 Spending Round included new targets for central government and associated bodies to deliver at least £5 billion of land and property sales between 2015 and 2020. In the Autumn Statement 2014, the government announced an increased ambition to release enough land for up to 150,000 homes in the same period.33 During our evidence session the Department accepted the need to improve its monitoring and made various references to taking account of the NAO’s recommendations in the next phase.34

26.However, while accepting that it needed to improve monitoring and provide assurance that the expected number of homes to be built was not ‘a mirage’, the Department also said it would want “to be careful about monitoring the private sector in the build-out”.35 We had made it clear in our questioning and challenge that it was not difficult to keep track of whether ‘potential’ new homes on sites had subsequently been built, and that it was a basic and common sense measure of success.36

24 C&AG’s report, Figure 6

27 Q 156; C&AG’s report, para 2.21

30 Q 9; C&AG’s report, para 2.18

33 C&AG’s report, paras 12-13