Business department says councils can’t get cut price government land

The government is to force the condemned Regional Development Agencies (RDAs) to sell their land assets to the highest bidder rather than pass them to councils to aid regeneration.

The Department for Business, Innovation and Skills (BIS) has ruled that the RDAs, which are to wind up by March 2012, will not be allowed to sell their assets for anything less than the highest price.

They will also not be able to enter deals with councils where payment for the asset is deferred until a final developer is found. The ruling comes despite the fact that chancellor George Osborne announced plans in the Budget to stimulate housing development by allowing the deferral of receipts for developers building on public land.

The RDAs were in many cases planning to pass land assets, which include many regeneration schemes, to local authorities on the basis that payment could be deferred until a viable development had been secured.

However a statement posted on the BIS website on Friday said that while councils will be notified of available sites and able to bid for sites, they will have to compete on the open market.

The statement said: “Several of the RDAs’ assets and liability plans included proposals to transfer assets to local authorities for a deferred consideration, that is to say, payment at a later date. 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.  

“BIS, as the accountable department, held discussions with HM Treasury and DCLG on whether such an approach might be feasible within the requirements of managing public money and the rules governing local authority finance. 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.  

“However, local authorities are 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.”

The government will start marketing the sites “shortly”.

The only exception is for sites owned as part of the Coalfields Regeneration Programme, which will be transferred to the Homes and Communities Agency.