1.Departments have made a slow start in releasing land. The new programme is back-loaded, which increases the risk that government will not meet its commitment. At the end of March 2016, almost a year into the new programme, government had disposed of land with capacity to build an estimated 8,580 homes across 77 sites, which represents 5% of the programme commitment. The performance of individual departments has varied. For example, by March 2016 the Department for Communities and Local Government had disposed of 12% of its target (land with a capacity for 4,326 homes), whilst the Department for Transport had achieved only 0.2% (with capacity for just 71 homes). The Department for Communities and Local Government told us that the latest figures, for June 2016 at the time we took evidence, showed progress to be around 7% of the programme commitment. Departments will therefore have to find land for around another 149,000 homes by April 2020, which represents a significant acceleration in the last years of the programme. The slow start to the new programme also suggests that departments either took their eye off the ball at the end of the previous programme that ran up to 2015 or are struggling to find suitable sites; resulting in a stop-start approach when it was entirely foreseeable that the programme would be extended under the new Government.
Recommendation: Individual departments should focus on increasing the rate of disposal to meet the target by 2020. At a programme level, the Department for Communities and Local Government should work with other departments to identify the barriers that are preventing the sale of land and the main risks, together with actions to address them and ensure any sites sold achieve an acceptable return for taxpayers while balancing the need for housing.
2.The majority of sites identified by departments for future disposal are speculative, and many are still being used to deliver public services. Departments have identified further sites for disposal within the life of the programme with potential capacity for over 104,000 more homes, a further 65% of the 160,000 commitment. Over 50% of the estimated housing capacity identified is on sites considered ‘high risk’. Many sites identified for disposal are still in operational use by departments, and their disposal depends on other policy decisions. For example, the Department of Health told us it has an objective to encourage organisations in the health sector to use the land they hold to provide accommodation for key health workers. Any delay in taking these decisions will back-load the programme further, and put at even greater risk the likelihood that government will deliver on its 160,000 potential homes commitment. Some departments are planning to identify sites with housing capacity in excess of their target to allow for a proportion of high risk sites to fall out of the programme. The Ministry of Defence is trying to reduce the ‘high risk’ element of its current forecasts from 68% to 17%.
Recommendation: All departments need to identify capacity over their individual targets to create sufficient contingency in the programme to meet the overall commitment, without feeling pressurised to include sites for disposal if they think it is unlikely that homes will be built on these sites.
3.The Department for Communities and Local Government has not made public the roles and responsibilities for the programme or decided how it will monitor the construction of homes on the sites sold. In December 2015 the Department for Communities and Local Government provided departments with a programme handbook, which sets out the objectives of the programme and the relevant responsibilities of those involved. But, despite previous commitments to do so, it has yet to publish these details. On monitoring the number of new homes actually built on land sold, we are pleased that the Department has now agreed to monitor construction, for both the current and previous programme, having previously rejected our September 2015 recommendation to do so. This will be fundamental to assessing value for money and the actual contribution of the programme to addressing the housing shortage, rather than judging success merely on a notional number of ‘potential’ homes. The Department has yet to decide on the detail of how it will monitor construction or make its approach public and the Department’s ‘general presumption’ that its role is over at the point of sale leaves us concerned about its ability to to assure the delivery of the homes the Government has promised. It is important for both transparency and accountability that the Department publish all details as soon as possible. It told us it hoped to do so “very soon”, but would not commit to a date.
Recommendation: After lengthy delays, the Department for Communities and Local Government must now publish the programme handbook, including details of how it will monitor construction, as soon as possible and inform us how it will do this. It needs to ensure that its approach to the monitoring of construction demonstrates how the programme is addressing the housing shortage.
4.The Department for Communities and Local Government has not yet decided what will be included in its annual report on the programme, or when it will be published. The Department has promised to publish an annual report for the programme, setting out progress towards the 160,000 potential homes commitment. The Department is yet to decide exactly what the annual report will include or when the first will be published, but said it expected the report to include postcode information and the number of homes built for all sites sold.
Recommendation: As a minimum, the annual report should cover: the number and estimated capacity of sites released, details of sites identified for future disposal including their risk rating, sales proceeds, details of sites released (including postcodes), and construction of new homes by type and tenure.
5.There are many factors for departments to consider in maximising value for money in the sale of land. Departments are to contribute to government commitments both to release public sector land for at least 160,000 new homes and also to realise £5 billion of receipts from the sale of land and property by 2020. Departments also have to ensure that they retain the estate necessary to fulfil their functions and provide public services, and that they do not compromise other objectives when disposing of land; the Department of Health, for example, wants to encourage organisations in the health sector to use the land they hold to provide accommodation for key health workers. There is also a risk to value for money if departments accelerate sales to meet the target without being sensitive to how the timing of sales can be key to securing the maximum return for the taxpayer.
Recommendation: Departments should make public their estate strategies to demonstrate how they decide that land is surplus. All departments should outline the factors they will consider to ensure that each sale represents value for money, and set out how they are identifying any wider benefits, including for staff and key workers, which contribute to the departments’ objectives.
1 November 2016