Alongside the 2018 Budget was a small announcement about an obscure piece of legislation that probably passed most people by. Buried in a consultation entitled “Planning Reform: Supporting the high street and increasing the delivery of new homes” were proposals to reform the General Consent Order for s.123 Local Government Act 1972. S123 prohibits the disposal of local authority land for less than best consideration without the consent of the Secretary of State. The General Consent Order, last updated in 2003, gives general consent for such disposals provided the undervalue is less that £2m. It is proposed to increase this amount to £5m or £10m in line with the inflation in property values.
Hewdon has been campaigning for reform for over 15 years, ever since we were asked to advise a local authority on a complicated and contentious development scheme that involved a land disposal. While we welcome the reform proposals as an improvement, they rather miss the point. The real trouble with the General Consent Order is not the threshold value, it is working out whether s123 applies and then quantifying the undervalue. If you are undertaking a simple disposal, it is easy enough. However, if there is a development or promotion agreement of some kind in place, working out whether you have actually disposed of an interest in land for consideration or granted an option that will in time generate contractual profit share rather than a share of disposal proceeds is tricky.
There is also the question of whether the constraints that give rise to the undervalue are legitimate planning conditions or non-planning conditions that favour a particular party. On top of that there are different considerations for land held for planning purposes, disposals using well-being powers and land subject to Crichel Downs rules. Then everything is subject at the moment (and probably for the foreseeable future) to European state aid rules that take a slightly different perspective and have different case law.
We have never quite understood why the government cannot repeal s123 and let local authorities rely on their general requirement to provide value for money and satisfy their external auditors. Until repeal happens, s123 will continue to be a bureaucratic encumbrance for local authorities who observe the rules (and will continue to be ignored by those who do not care).
On 22 October 2018, Dominic Williams gave evidence to a House of Commons Select Committee Inquiry into “High Streets and Town Centres in 2030”. He was speaking mainly about landlord and investor behaviour but it a subject on which we have much wider expertise. Dominic wrote the 2016 RICS Information Note on the subject and we published one of the first papers predicting the retail revolution as long ago as 2009 . Thus far, most of the debate has been about high streets and town centres as places rather than as drivers of growth. So, although it has been a subject of keen interest for local authorities, LEPs have been (generally) less involved up till now. That may need to change as the wider economic impacts of town centre decline sink in. When it does, we are here to help.
The House of Commons Library is accessible at https://www.parliament.uk/mps-lords-and-offices/offices/commons/commonslibrary/ and it is one of the most valuable trade secrets I know. The Library produces reports on almost any topic that is under consideration by Parliament in formats ranging from weekly briefings and briefing packs for debates to deeper research papers often covering the history of legislation in a particular field and an analysis of its economic impact. Because of its status, the Library has no choice but to produce reports that are authoritative and unbiased, so it provides the best and most reliable summaries of relevant topics. Would that Wikipedia was so trustworthy.
It is with some sense of vindication that we can report that the Library recently (10 February 2017) published a briefing paper on “Property Taxation and Revenue Incentives”. This paper used a detailed statistical analysis of local authority behaviour following the introduction of 50% Devolution of Business Rates to show that it has had no discernible incentive effect at all.
2016 was memorable for having too much news; we are still adjusting to the new world, like everyone else. But in the middle of upheaval, it was good to see some of our work take physical shape.
There are now housing developments under way at North Walsham, Loddon and Little Plumstead in Norfolk assisted by loans from New Anglia LEP and Greater Norwich Growth Board. The New Anglia Enterprise Zone – for which we helped bid – already has developments under way at Norwich Research Park and Ipswich as well as a first tenant announced at Suffolk Business Park in Bury St Edmunds. The Ipswich Waterfront Innovation Centre at University of Suffolk is now open for business.
In Greater Cambridgeshire and Greater Peterborough, Trinity College’s Sir John Bradfield Centre in Cambridge is almost finished as is the Fletton Parkway road scheme in Peterborough. The EZ site at Lancaster Way Business Park, Ely has new road infrastructure and a major new tenant while the Agritech grant scheme has several completed small rural projects.
In Hertfordshire, the South Oxhey town centre regeneration is on site; road infrastructure has been put in at the Watford Health Campus and Elstree Studios has opened the George Lucas stages.
The Local Economy Policy Unit at London Southbank University was started in the 1980s. LEPU is responsible for publishing “Local Economy” a peer-reviewed academic journal. Dominic Williams is a member of the editorial board of Local Economy and has contributed a number of articles including “Spatial Dimensions of Social Mobility”, the article that was awarded the 2010 Sam Aaronovitch prize. Continue reading “Local Economy”
Dominic Williams writes his own blog , “In my own time” at http://dominicwilliamshewdon.blogspot.co.uk/ The views expressed are his alone.