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Ministers announce RDA asset 'fire sale'

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Ministers have announced that one in five of the regional development agencies’ £500m land and property assets will be sold-off on the open market.

In a letter to shadow business secretary John Denham (attached, right), business minister Mark Prisk said the government had decided to sell “about 20%” of the regional development agencies land and property assets, most recently valued at around £500m.

He said the sites approved for sale were those “where the market is able to support a reasonable price which in our view reflects best value”.

He said that “in some cases” councils would be given first refusal to acquire the assets.

Mr Prisk said the move was not a “fire sale”. He said: “RDAs routinely buy, develop and sell assets at market value and this will continue as part of their disposal of assets. Assets will be sold at fair and appropriate value or transferred within government for continued public sector support, or until such sale can be agreed.”

However, the move does represent a rejection of the advice given by a number of the RDAs to ministers when they submitted their asset plans earlier this year.

Many of the agencies, including One North East, Yorkshire Forward and the South East RDA, warned ministers that selling-off their assets could flood local markets and would be unlikely realise the greatest value for those sites, particularly at this point in the economic cycle.

The RDAs advised ministers that many of the sites should be transferred to local authorities either on a deferred payment basis, or in the form of trust, so that the regeneration aims could be fulfilled and greater receipts realised over the longer term.

However, ministers said the need to pay down the deficit was the primary driver therefore deferred payment options would not be allowed.

Shadow business minister Gordon Marsden said the move was a “fire sale” and the government’s decision to sell-off assets in the regions contrasted markedly with the approach in London, where the London Development Agency’s assets are to be “gifted” to the Mayor’s office.

He said ministers’ offer to give councils first refusal was a “complete sham”. “[They] know full well local authorities will have no ready money to purchase assets at full market value and local enterprise partnerships don’t even have powers or the ability to do so.”

He said: “This is in complete contrast to the free gift [the government] is making to Boris Johnson by handing over all the LDA’s assets over to him.

“In comparison to this transfer of assets to London, the way in which … ministers are treating the English regions is outrageous. Ministers are starving the regions of access to the key assets they need to push growth, create jobs and stimulate their local economies.

“Yet again DBIS have lost control of the growth and economic agenda. They have been forced to go along with a Treasury firesale that torpedoes the aspirations of LEPs and local authorities alike.”

A full list of the assets put up for sale can be seen in the letter, attached above right.

For full details on the RDAs asset plan, including the each RDAs plan, see Allister Hayman’s blog.

 

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Readers' comments (1)

  • Yet again London which overall is wealthier than the regions gets extra and the regions suffer - a funny way of saying we are all in this together!

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