To ask the Secretary of State for Housing, Communities and Local Government, what the process for councils to dispose of property assets is; whether councils must demonstrate best value; and what the obligations of the council where a property is being transferred to a wholly owned subsidiary of that same council are.
7 May 2019
Public bodies should generally dispose of surplus land (including property assets built on that land) at the best possible price reasonably obtainable. However, the Government recognises that disposing of such land at less than best consideration can sometimes create wider public benefits.
With regards to land (and property assets) held in the General Fund, a general consent issued under section 123 of the Local Government Act 1972 allows local authorities to dispose of land held for purposes other than housing or planning at an undervalue of less than £2 million, without seeking a specific consent from the Secretary of State where they consider it will help secure improvement of the economic, social or environmental well-being of the area. Secretary of State consent is required for disposals of such land at an undervalue of more than £2 million. Specific Secretary of State consent is required for disposals of land held for planning purposes regardless of the sale value.
Specific rules also apply to housing land (including property assets). The 2013 General Consent under section 32 of the Local Government Act 1988, permits a local authority to dispose of such land at market value subject to condition that:
(a) the disposal the property asset is not subject to a secure, introductory or demoted tenancy to occupy from the local authority to a landlord who is not another local authority;
(b) the disposal of land where there is Reversionary Interests in Houses and Flats; or
(c) the disposal of land to a body in which the local authority owns an interest except:
(i) where the local authority has no housing revenue account; or
(ii) in the case of a local authority with a housing revenue account, the first 5 disposals in a financial year.
Secretary of State consent is required if a local authority wishes to dispose of housing land (including any property assets built on that land) at less than best value, including disposal to a local authority housing company.