Local Government and Communities Committee
Meeting date: Wednesday, May 12, 2010
Official Report
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Subordinate Legislation
Disposal of Land by Local Authorities (Scotland) Regulations 2010 (SSI 2010/160)
Agenda item 3 is consideration of subordinate legislation. Members have received a copy of the Disposal of Land by Local Authorities (Scotland) Regulations 2010 (SSI 2010/160) and no motion to annul has been lodged. I ask members whether they agree that they do not wish to make any recommendations to Parliament in relation to the regulations. At least two members are indicating that they want to speak: Mary Mulligan, who gave us some notice; and David McLetchie—
Who did not, because he has just read the instrument.
I will be brief, because I have raised a number of questions through the clerks and am grateful to them and to Scottish Government officials for the answers that I have had so far. However, I still have an issue with the regulations.
To begin with, I say that I support the flexibility that the regulations offer to local authorities in respect of sales of land, because I have experience of cases in which it makes sense to do a deal that is perhaps for less than market value or whatever. However, my final question to officials was: if there is concern about a particular transaction, how will that be addressed? I was told that the way of addressing it would be to raise the issue with the local council. It seems to me that there are issues with putting a question about a local council’s actions back to the council itself.
Is there some way in which, if someone had a concern, they could raise it with the Accounts Commission, Audit Scotland or whichever is the appropriate body, which could have a look at the matter when they did their overview of local authorities? That would ensure an independent view of the action. I do not know whether that is appropriate, but I would like to have the opportunity to ask the Scottish Government whether it is and, if not, whether the Government can suggest a mechanism that would reassure people that if there is a concern, it will be looked at. I do not wish to cast aspersions, but there needs to be some kind of back-up procedure.
I thank Mary Mulligan for outlining the nature of her question.
Mary Mulligan has raised a very good point, in particular when we bear it in mind that the previous regulations required consent for such disposals from Scottish ministers, so there was an independent check in the system. From what Mary Mulligan has said, it appears that there is not an independent check in the system that we are being asked to approve. That is a very important point, which should be looked at.
My point is that the regulations are based on the concept of “the best” consideration—the best price. How does one determine what the best price is? Is the best price the price determined by the exposure of the land or property in question to the market? In that case, bidders and a range of prices would be determined in an open market, and then approval at a lower than best price would be authorised in accordance with the regulations. Alternatively, is “the best” in most situations the best that is determined by a valuation—by a district valuer or some kind of independent evaluation—and a discount would be sought on that? That is not necessarily the same as the discount relative to a price offered in an open market.
The other issue that I am interested in is the “marginal amount”, which is 25 per cent of the best consideration—there does not seem to be an upper threshold, although there is a minimum threshold. Is it correct to say that, under the regulations, if a council had a vacant site available for a housing development, which on the open market was worth £2 million for a private development, the council would be entitled to sell it for £1.5 million to a housing association for affordable housing? That is the way that I read the regulations, but I would be interested to know whether that is correct. A number of us probably know of instances in which councils, in their desire for value maximisation, shall we say, are withholding marked land from the marketplace and are not considering disposals at a discount, even for the purposes of an affordable housing investment strategy.
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Further to Mary Mulligan’s point, if there is an appeal against a sale, at what point can the council dispose of the land? If a council goes ahead with a sale, ownership will transfer at the point of sale. If there is an appeal, will that restrict the council’s ability to sell? I have come across a couple of instances in which people challenged a council’s decision to sell land but no appeals process seemed to be built into the disposal arrangements, which was unfortunate.
If we are thinking about the best use of land that is disposed of, we must consider how the issue fits into the overall programme that the Government is trying to promote. That relates to what David McLetchie said.
In the light of members’ questions, we will ask the clerk to make someone available to answer questions at the next opportunity—I think that that will need to happen at our meeting next week.