Sell assets to support wider council services
Author: Dan Peters, the MJ |
Local government has been urged to get the best value for money it can from its £2.5bn of ‘surplus’ assets.
The soon-to-be-abolished Audit Commission called on councils to ensure they had a ‘strategic approach to managing these assets’.
It said local authorities needed to be ‘mindful of the high costs that can be incurred through occupying buildings’, adding that in 2012/13 English councils spent an estimated £5.6bn – about 4% of revenue spending – on premises-related expenditure.
But the Chartered Institute of Public Finance and Accountancy (CIPFA) pointed out surplus land accounted for only 1.5% of total assets on the balance sheet.
CIPFA’s assistant director of local government finance, Alison Scott, said: ‘To highlight surplus assets in this way does not present an accurate picture of how local
authorities manage their assets.
‘The reality is that at any one time local authorities will be holding a range of assets for future use or to make sure that they can achieve the best value possible for them in the longer term.’
The commission’s intervention came a day after the Queen’s Speech announced that
an Infrastructure Bill would seek to boost housebuilding by selling off unused public land for development.
Commission chairman Jeremy Newman said: ‘To be clear, we are neither advocating that local government starts a wholesale sell-off of their land and property nor are we suggesting councils shouldn’t spend money on buying assets or on investment to improve their existing property.
‘What we are highlighting is a group of assets that do not provide immediate benefit to local communities, but still require councils to spend money on maintaining them. These assets have potential value for councils.
‘While not all such land or buildings may be sellable, councils should consider how much value they gain from surplus assets and how this could be increased.’
Mr Newman continued: ‘In order to extract the most value from their assets, councils should not sit on valuable land and buildings that can be better used as a resource to support their wider service and strategic objectives.’