8.In our September 2015 report, on the first land disposals programme, we concluded that the Department for Communities and Local Government could not demonstrate the success of the programme in addressing the housing shortage or achieving value for money. We made several recommendations for improvement. The Government’s Treasury Minute response to our report failed to address our concerns adequately and, in light of there also being the new programme which started in May 2015, we recalled the Department to give further evidence in January 2016. This section of our report looks at the progress made by the Department for Communities and Local Government in setting up and managing the new programme.
9.In our September 2015 Report we recommended that the Department for Communities and Local Government needed to be clear with individual departments as to the guidance they are expected to follow, and must set clear documentary and data requirements. The Department accepted our recommendation and, in December 2015 it provided other land-owning departments with a programme handbook, which sets out the objectives of the programme and the relevant responsibilities of those involved. The handbook also sets out how disposals will count against the overall commitment and how housing capacity will be estimated and counted. The main sections of the handbook are complete, and the document has been used by departments since the start of the year. The Department told us that it regards this document as a ‘living document’, rather than a draft document, and that it will be revised as and when required.
10.In its Treasury Minute response to our previous report, the Department also said that it would publish the new guidance materials in spring 2016, but at the time of our evidence session in September it had still not done so. The Department told us that it hoped to publish the document “very soon”, but that it could not be more specific.
11.In our September 2015 report we commented that the Department could not demonstrate the success of the programme in addressing the housing shortage or achieving value for money, in part because it did not collect information on the actual number of houses built or under construction. Instead, it chose to focus only on a notional number for ‘potential’ capacity for building houses on the land sold in order to determine ‘success’. Nevertheless, in its December 2015 Treasury Minute response the Department rejected our recommendation to monitor progress in the actual construction of homes under the new programme. The Department told us that its position had now changed, and that new Ministers had asked it “to monitor the building of homes right through the planning system on all our sites, in the new programme and the old programme”.
12.The Department has yet to decide on the detail of how it will monitor construction or make its approach public. It explained that its general presumption will be that, once a site is sold, its role is over, but that it would monitor whether construction is happening as that will be important for transparency and understanding the impact of the programme. The Department further explained that it would rely on contracts struck, and the level of planning certainty that was in place at the point of sale, rather than routinely intervening if progress on a site were ‘stuck’. However, the Department added that it and the Homes and Communities Agency might intervene on some bigger or more important sites where they considered they could make a difference. While acknowledging the Department’s statement that it might sometimes intervene to try and move construction forward, we were surprised by the Department’s ‘general presumption’ that its role was over at the point of sale, given government’s wider policy aim that there should be one million homes built by 2020.
13.The Department has committed to publishing an annual report for the programme, which will set out progress towards the 160,000 potential homes commitment. The Department has not yet decided exactly what the annual report will include or when the first one will be published. However, the Department told us it expects the annual report will include details of the number of homes built and postcode information for the sites sold. We welcome the opportunity the annual report will provide the public, Parliament and this Committee to monitor the programme’s progress and to hold the Department to account for it.
14.There are many factors for departments to consider as part of their responsibilities for ensuring that each land sale represents value for money for the taxpayer. In the Spending Review and Autumn Statement 2015, the Government outlined 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 must sell land to contribute to both of these commitments, and therefore have to balance the need to meet the Spending Review 2015 capital receipts target and to ensure homes will be built on the land sold.
15.Departments also need to retain the estate necessary for fulfilling their functions and providing public services. The Department of Health noted that part of its rationale for engaging Sir Robert Naylor was to look at how the department can release land whilst making sure it ends up with the health estate it needs to deliver services. The Department of Health explained how it was also balancing its land disposal target with its objective to encourage organisations in the health sector to use the land they hold to provide accommodation for key health workers.
16.There is a risk to value for money if departments accelerate sales to meet the land release target, without being sensitive to how the timing of sales can be key to securing the maximum return for the taxpayer. We asked if obtaining value for money mattered more than reaching the land disposals commitment. The Department for Communities and Local Government told us that for the most part it did not see a conflict between the two. It told us that the programme deadlines must not compromise value for money, when it may sometimes be better for individual departments to defer a sale in order to get a better return. It said that it managed this risk by trying to create a buffer and increasing the amount of land identified for potential sale.
17.The Ministry of Defence told us that it plans for around 3,000 of its total contribution to the programme commitment to come from cancelling contracts on property it leases from Annington: the private company to which the Ministry of Defence sold its Married Quarters estate in 1999. On cancellation of one of these leases the Ministry of Defence has to pay a remediation charge, which in the recent past has averaged at around £14,000 per home. The Ministry of Defence acknowledged that this posed a value for money question that needs to be addressed.
15 HC Committee of Public Accounts, , Second Report of Session 2015–16, HC 289, September 2015.
16 HM Treasury, , Cm 9170, December 2015.
17 page 7
18 ; , paras 9, 10, 2.5
19 Treasury Minute response, page 7; , paras 9, 2.6
21 HC Committee of Public Accounts, Second Report of Session 2015–16, HC 289, September 2015; Treasury Minute response, page 5.
23 ; , paras 11, 2.38
25 , paras 11, 2.38
27 , paras 8, 2.29
28 HM Treasury, , Cm 9162, November 2015.
30 , para 2.31
1 November 2016