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Ministers block transfer of RDA assets to councils

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Ministers have blocked the regional development agencies’ plans to transfer their land and property assets to local authorities, citing the need to reduce the deficit.

Several regional development agencies, in their assets and liabilities plan submitted to ministers, recommeded that some of their land and property assets be transferred to councils, who would develop them further with payment made upon future sale.

One North East recommended that of the agency’s 48 land and building assets, 13 be transferred to relevant local authorities to ensure their further development before an eventual sale, with payment for the asset deferred until such time that the sale was realised.

However, in a statement that has appeared on the Department for Business, Innovation & Skills’ (DBIS) website, the department said deferred payments for the RDAs assets of this kind would not be allowed.

The statement said: “The government has confirmed to the RDAs that it will not be appropriate for RDAs to transfer assets to local authorities or other bodies for deferred consideration.”

The statement said DBIS had held discussions with Treasury and the Department for Communities & Local Government (DCLG) to determine “whether such an approach might be feasible”.

“It was concluded, however, that within the constraints imposed by the current fiscal climate it is not feasible for local authorities to delay payment for RDA assets, the statement said.

The statement added that councils would be able to purchase assets at the market value, and “other options to allow local authorities to be involved with RDA assets in future, are being considered.”

Shadow business minister Gordon Marsden said the decision was a “disgraceful betrayal of the principles of localism and keeping assets in the regions for which they were intended”.

He said: “It makes a mockery of the government’s attempts to portray itself as supporting local authorities in stimulating growth locally and it shows how impotent DBIS ministers have been as defenders of stimulus across the regions. This is just a cave-in for ‘fire sale’ demands from [communities secretary] Eric Pickles and the Treasury.”

One North East had advised ministers that transferring some of its land and property assets to councils on a deferred payment basis would have enabled the councils to prepare the sites for development and then sell them on for the best price “reasonably obtainable at that time”, with receipts then payable to DCLG or the national housing quango Homes & Communitiers Agency.

The report also added that the agency would be “seeking written agreement from DCLG/HCA that proceeds received by them under this solution will be utilised for the economic development and regeneration of the north east”.

However, the statement by DBIS effectively scotches this plan.

Other RDAs, including the south west and Yorkshire Forward had also explored the possibility of passing assets to local authorities on a deferred payment basis, but not to the same extent as One North East.

In its statement DBIS said the government would shortly publish a list of those assets held by RDAs it had identified for “short-term market sale”.

This week business minister Mark Prisk told MPs he was expecting the receipts of the sale of RDA asset to be £61.5m in 2012/13 and £43.5m in 2013-14. This total of £105m suggests that nearly a quarter the RDAs assets could be put up for sale in the short term.

DBIS added that where the RDAs had identified land and property assets for “medium to long-term market disposals (implying that the market is not right for them in the short term)” these are still being reviewed”.

For full details of the RDAs assets plans see Allister Hayman’s blog here.

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Readers' comments (1)

  • Just another hair brained scheme by Osborne to sell off public assets to the private sector. Ensuring that the public sector investment is lost locally, the receipts used elsewhere, and the private sector make more profits for their shareholders!

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