Interesting report in the Sunday Telegraph about the amount of property owned by councils. It is estimated to be worth £250 billion and to cost £100 billion a year to maintain. The article has its main focus on land although I suspect the figures include municipal buildings as well. The Department for Communities and Local Government are to release detailed figures.
The Sunday Telegraph headline says councils will be "ordered to make money from land and property or sell the off." I would be surprised if we were to be given such an "order" as it would be contrary to localism. But a requirement for transparency would be reasonable (in Hammersmith and Fulham we already publish our asset register.) Also perhaps a nudge, an incentive to sell surplus property – the article talks about a pilot scheme.
Anyway for many councils payment of debt interest is a big item of spending and much greater attention needs to be paid too asset management. Why do councils need to own golf clubs? Or pubs? Or shops? Or car parks? Or farms? Or great tracts of surplus land being used for nothing in particular?
Some in local government may retort that central government could also be doing more in terms of asset sales. that is a fair point. The Government plan to sell off 7,000 acres of surplus land to provide 100,000 homes and raise £10 billion. Add a nought or two to the end of these figures and we might get somewhere, As I mentioned in a piece for the Municipal Journal the Ministry of Defence owns 600,000 acres – roughly equivalent to the size of Surrey. I wonder what the annual maintenance costs are.
For both central and local government reducing debt interest is a much neglected aspect of reducing spending. Chapter 11 of the excellent new paper from the Institute of Economic Affairs, Sharper Axes, Lower Taxes, suggests privatisation proceeds of £112 billion. Sounds pretty modest to me.