Latest Public Sector News

24.09.15

DCLG cornered over housing crisis as it lacks any record of land disposal

Government plans to release enough public land to build up to 100,000 new houses have been branded “wishful thinking dressed up as public policy” by the Public Accounts Committee (PAC), as it revealed that the DCLG does not record information on the number of houses built.

In an inquiry into the government’s land disposal programme, the committee found that the DCLG cannot demonstrate the success of the project in addressing the housing crisis because it does not even collect information on its outcomes. It also lacks information on proceeds from land sold and whether the parcels of lands were sold at market value, thus being unable to prove if the programme achieved any value for money.

The PAC argued that the department chose to focus on “notional number for ‘potential’ capacity for building homes” on land sold by individual departments instead, as a way to measure its success.

It also counted towards the programme’s target the capacity of land sold before the project was even launched – with some land sales dating back to 1997.

Labour’s Meg Hillier MP, chair of the PAC, said: “The government should be embarrassed by the failings uncovered by the PAC’s inquiry into land disposal. Its entire approach has been wishful thinking dressed up as public policy.

“It also demonstrates an alarming complacency over the future of an irreplaceable public asset. Many thousands of people desperately need homes and an effective land disposal programme should provide two significant benefits: much-needed housing and much-needed cash for the public purse.

“Yet the government has no record of how many homes have been built or are under construction. There is no means of knowing whether taxpayers are getting a good deal from the sale of their land.”

She added that the committee was told enough public space was sold off to accommodate the programme’s target at nearly 950 sites, with land disposed by the Ministry of Defence alone accounting for 39,000 properties.

However the government cannot prove how many of these homes now exist, or will ever exist. Hillier criticised DCLG for merely “hoping huge numbers of houses would spring up”.

“Government departments have been instructed to draw up plans for further spending cuts and many people are rightly worried about the effects these will have on struggling public services. It is an insult to taxpayers that the potential economic benefits arising from the sale of public land should be put at risk by such short-sighted government mismanagement.

“With the next housing target already announced, the government needs to learn from its mistakes.”

John Healey MP, shadow housing and planning minister, said the report was “damning” and slated ministers for being “extraordinarily negligent” in the way they deal with public land.

He added: “Ministers would do well to remember they are stewards of this land on behalf of the public. It is taxpayers who are sold short when ministers sell public assets for less than they are worth. And we all pay the price when we build fewer homes than the country needs.

“After five years of failure on housing, it’s time the government got a grip.”

DCLC must "address programme weaknesses"

The committee urged the department to address its weaknesses and failures in order to achieve its “much greater ambitions” for land disposals during this Parliament.

The DCLG has accepted that it needs to improve its general monitoring, but claimed that it was only accountable for the overall target of releasing land – not the housebuilding. However, it acknowledged that building homes was ultimately why it wanted to release land, and that land release was “one of the biggest constraints” in England’s housing market.

But it told the committee that it had been a conscious decision not to collect information on the actual number of houses built, and it did not ask any department to collect similar data at programme level or otherwise. It justified this by saying it was “worried about putting a burden on developers and basically making public sector land some sort of bureaucratic problem for them in a way that private sector land was not”.

According to the PAC, the department must specifically track sale proceeds and progress with the actual construction of new homes to oversee the new programme effectively. It must also oversee the programme in a way that safeguards value for money achieved from disposals.

Part of concerns included the fact that the department’s data collection had “significant omissions”. To fix this, it must set minimum documentary and data requirements for all land-owning departments, as well as design and implement a data validation process.

The PAC has also said it will hold the department to account for the value of the new programme. It will also press the department to only count the number of homes built during 2015-20, for which it set a 150,000-house target. This should include the number of affordable housing.

To make sure the DCLG can confirm how many jobs are being created by the programme, it must set our clearer parameters for job creation and collect and audit data to make sure these roles are filled.

The programme’s progress must also be laid out transparently in a full report setting out its objectives and successes, as well as how it had addressed recommendations from the National Audit Office.

Background

In June 2011, the then housing minister announced plans to release government land to build up to 100,000 houses and create 25,000 jobs by 2015. The DCLG holds responsibility for this target, while individual departments are responsible for identifying this surplus land and estimating the number of potential homes.

The Homes and Communities Agency was responsible for collating and reporting data to monitoring boards and acted as the disposal agent for DCLG.

The department’s data in March 2015 showed that the government had disposed land with an estimated capacity for almost 110,000 homes, but it cannot demonstrate any practical success.

Comments

Steve Holgate   24/09/2015 at 11:47

If local government were to dispose of its assets in this way and not keep records, we would, rightly, be hauled over the coals. A government department does the same and they brazen it out with no consequence.

Claire   25/09/2015 at 09:55

From conversations I had at the time I think the HCA pushed very hard to encourage the government to focus on outcomes (ie number of homes built and meeting local housing needs) but didn't manage to convince them to take a longer term view. At best there was some commitment to de-risk sites, take longer to bring them to market but get higher capital returns. But nothing to stop the buyer landbanking the site for many years. But I see real energy at local level now for outcomes not soundbites. So I'm hopeful that this is improving and the attention from PAC will help.

Derek Doran   28/09/2015 at 09:17

As an NED of a developing housing association I can confirm the exhaustive statistical returns we have to provide to the HCA, even when it it private borrowing purchasing a private site and being developed privately by developers. One rule for government and one rule for the rest !.

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