![Councils do not own
land for its own sake or
to make profits. Assets
are held for pursuing
policy objectives.
A: Treasury
B: RICS
C: Locality
A: The Treasury
Value for m
oney and the valuation of public sector assets [July 2008]
Value for m
oney and the valuation of public sector assets [July 2008]](https://image.slidesharecdn.com/folclhfoundationslessthanbestsh230419-190619151002/85/The-Less-Than-Problem-19-320.jpg)
![The valuation of a
publicly owned asset is
based on the interests
of society as a whole,
not the council alone.
A: Treasury
B: RICS
C: Locality
A: The Treasury
Value for m
oney and the valuation of public sector assets [July 2008]
Value for m
oney and the valuation of public sector assets [July 2008]](https://image.slidesharecdn.com/folclhfoundationslessthanbestsh230419-190619151002/85/The-Less-Than-Problem-21-320.jpg)
The "Less Than" Problem
- 1. TheThe LESS TH<NLESS TH<N ProblemProblem @stephenhillFP@stephenhillFP
- 2. Proper Price…Best Price Best Price for the taxpayer…Highest Price Best Market Price…Highest Market Price Full Market Price…Best Consideration Best Possible Consideration Just Market Consideration Best Value…Market Value Best Market Value…Best Pure Financial Value Full Market Value…Highest Monetary Value Open Market Value…Private Market Value Best Possible Income…Highest Financial Offer Market Rate…Maximum Capital Receipt Most Cash…Quick BuckMARKETVALUE
- 3. Best Outcomes in respect of the objectives of the HCA Best Possible Outcomes for the Community Best Value for Our Communities Best Value for Public Money Best Value for the public sector as a whole, as well as ensuring proper accounting and reporting responsibility Best Value taking in Wider Considerations Wider Public Benefit…Wider benefit to the community Wider than Just Market Consideration Greatest Public Benefit…Wider public interest Public benefit…Public benefit for public assets Social benefit…Community benefit…Social outcomes Good public use…Better regeneration outputs Social Value…Value for money…Undervalue BESTConsideration Reasonably obtainable
- 4. Words about Value that don’t mean anything • January 2008 Commons Committee Stage Discussion on ss.10 & 50 of the Housing & Regeneration Bill • Minister of Housing & Planning, two former Housing Ministers and MPs with local government experience. • FORTY FOUR attempts to distinguish social & economic value… rather than just “Best Consideration reasonably obtainable” • The Minister couldn't convince the Committee that councils could already do what the MPs wanted… • And that’s the problem… …It’s easier than it looks
- 5. RICS Land & Society Commission 2011 A well managed disposal The planned disposal is fully consistent with the council’s overall strategies, policies and programmes, especially its Local Plan and Asset Management Plan. ‘Best consideration' and 'less than best consideration' disposals, should always consider social, economic and environmental objectives alongside the organisation’s approved financial objectives, reflecting the impact of the National Planning Policy Framework and local planning policies on the use of the asset. The Punchline
- 6. Local Government Act 1972 S.123 Disposal of land by principal councils. (1)…a council may dispose of land held by them in any manner they wish. (2)Except with the consent of the Secretary of State, a council shall not dispose of land under this section, otherwise than by way of a short tenancy, for a consideration less than the best that can reasonably be obtained.
- 7. Local Government Act 2000 S.2 Promotion of well-being (1) Every local authority are to have power to do anything which they consider is likely to achieve any one or more of the following objects— (a-c) the promotion or improvement of the economic … social…and the environmental well-being of their area. (2)The power under subsection (1) may be exercised in relation to or for the benefit of— (a)the whole or any part of a local authority’s area, or (b)all or any persons resident or present in a local authority’s area. Repealed except in W ales
- 8. General Consent 2003 Disposal of local authority assets • Council disposals need to be for the most valuable use allowed for that site… Unrestricted Value • This may be more than the actual purpose for which the site is being sold… Restricted Value • If the difference is less than £2m, then the General Consent allows the sale • If the difference is more than £2m, then a specific MHCLG approval will be needed • ‘Wellbeing objectives’ and ‘Voluntary conditions’ can both affect the difference…in different ways. • Assumes there is always a difference…hence…
- 9. The LESS TH<N Problem • Doesn't apply to 1985 Housing Act land • Proposes the ‘wellbeing test’ • Meanings incomplete or by inference, esp. ‘voluntary conditions’ • Obsolete – interpretation now affected by later legislation • Negative language encourages caution: Disposal…Less than…Undervalue …sounds like… Loss…giving away… Worth…less • Sound valuation principles…not to be confused with the need to raise the most money…that’s a political choice, not a valuation issue
- 10. The Localism Act 2011 Part 1…applies a general power of competence to local authorities in England…The well-being power in the Local Government Act 2000 was repealed with respect to England... S.1 General Power of Competence (1) …a local authority has power to do anything that individuals generally may do. The power extends to all councils in England, including and ‘eligible’ town and parish councils.
- 11. Localism Act 2011 S.88 Land of community value (1)…a building or other land in a local authority's area is land of community value if in the opinion of the authority— (a)an actual current use of the building or other land… furthers the social wellbeing or social interests of the local community
- 12. Planning & Compulsory Purchase Act 2004 S.99 Compulsory acquisition of land for development (1A) But a local authority must not exercise the power…unless they think that the development, re-development or improvement is likely to contribute to the achievement of any one or more of the following objects— (a-c) the promotion or improvement of the economic… social…and environmental well-being of their area.
- 13. NPPF Achieving sustainable development means that the planning system has 3 overarching objectives, which are interdependent and need to be pursued in mutually supportive ways (so that opportunities can be taken to secure net gains across each of the different objectives)…economic…social… and environmental QED…
- 14. RICS Land & Society Commission 2011 A well managed disposal The planned disposal is fully consistent with the council’s overall strategies, policies and programmes, especially its Local Plan and Asset Management Plan. ‘Best consideration' and 'less than best consideration' disposals, should always consider social, economic and environmental objectives alongside the organisation’s approved financial objectives, reflecting the impact of the National Planning Policy Framework and local planning policies on the use of the asset. Voluntary Condition has to be something other than could be achieved by a local authority power, statutory duty or planning policy
- 15. “A Red Book Valuation” isn’t…
- 16. International Valuation Standards 2016 Defined Basis of Value – Equitable Value (formerly Fair Value) 50.1 Equitable Value is the estimated price for the transfer of an asset or liability between identified knowledgeable and willing parties that reflects the respective interests of those parties. 50.2 Equitable Value requires the assessment of the price that is fair between two specific, identified parties considering the respective advantages or disadvantages that each will gain from the transaction. In contrast, Market Value requires any advantages that would not be available to market participants generally to be disregarded. 50.3 Equitable Value is a broader concept than market value.
- 17. S.79 A CLT must satisfy three conditions… 1.Further the economic, social and environmental interests of a local community 2.Own and use land and other assets only to benefit the local community 3.Have an open membership with locally accountable democratic control Housing & Regeneration Act 2008 Change the wayChange the way the land marketthe land market works…works… ……and be aligned withand be aligned with councils’ powers, dutiescouncils’ powers, duties and planning policyand planning policy
- 18. Have you been paying attention???? Who said this?
- 19. Councils do not own land for its own sake or to make profits. Assets are held for pursuing policy objectives. A: Treasury B: RICS C: Locality A: The Treasury Value for m oney and the valuation of public sector assets [July 2008] Value for m oney and the valuation of public sector assets [July 2008]
- 20. Councils should work with partners and community groups to make the best use of their assets for the benefit of their local community…using property to shape places and deliver economic, social and environmental outcomes. A: Treasury B: RICS C: Locality B: RICS Local Authority Asset Managem ent Best Practice Guides - Introduction
- 21. The valuation of a publicly owned asset is based on the interests of society as a whole, not the council alone. A: Treasury B: RICS C: Locality A: The Treasury Value for m oney and the valuation of public sector assets [July 2008] Value for m oney and the valuation of public sector assets [July 2008]