Sunday, 7 August 2011

Pickles makes an Ass(et) of Himself..

Before the riots and during the worldwide meltdown of the markets, there was a curious diversion as Local Government Minister Eric Pickles authorised the release of a website map from his Department of Communities and Local Government (DCLG) website. The map purported to show the location and existence of property assets owned and held by local authorities.

The release of this information prompted a response of self-righteous indignation from the usual suspects bit also betrayed the gross ignorance surrounding why and how local authorities hold property. In essence, authorities have property assets for two reasons:

1)Because they have to - the property is held to enable an authority to provide the services which it is statutorily required to provide.

2)Because they want to – Councils hold property because they can derive an income or because there is substantial potential capital receipt in a future disposal in the event of planning changes.

If you take the average County Council for example, around 80-85% of the value of its assets is tied up in Schools and effectively that potential capital is out of reach. It is possible for an authority to merge two neighbouring schools on one site and dispose of the other site but the income from the sale will be used to refurbish and rebuild the combined site.

The emergence of the Academy School has been, from an asset perspective, a disaster for local authorities. As schools seek to become Academies, Head Teachers have been endeavouring to grab land around their school as they can sell that off in the future as an alternative source of income. This land is of course public land and Councils face having to give it away to Head Teachers and Academy Trusts who seem as interested in property speculation as they do the educational development of their children.

The Coalition is committed to alternative models of service delivery for local services but a library run by volunteers will still need to be maintained, repaired, heated and lit and who pays for all that – the volunteers, a local charity? In truth, getting some volunteers to hand out books is the least of the issue when it comes to providing services. Will the same hold true for Youth Centres and Adult Education? No one is suggesting volunteers will run the local Fire Service but all these properties need to be held and maintained.
Offices are a big overhead for authorities and it may well be that as Councils share back office provision, we will see a reduction in the size of their office accommodation. There is the issue of a glut of relinquished commercial property coming on to the local markets of many large towns depressing the overall value and it may be that some former Council office premises will have to remain vacant until market conditions improve.

Councils also hold property because they make money from that property – owning the Freehold of sites of car parks, shopping centres, renting out units as small business ventures – all these are sources of income. In addition, the more thoughtful and far-sighted authorities actually chose to invest in property in 2008 when prices were depressed. Acquiring cheap commercial property at a time of poor market conditions is of huge long-term benefit to any organisation and the expressions of ignorant outrage from some show just how little those who complain about local Councils actually understand how they work.

Indeed, it’s generally accepted that local authority work has done much to keep the construction industry going in the recession, preventing more people losing their jobs and the consequent draw on Government expenditure and fall in tax income. In addition, the continuing high demand for school places (completely unaddressed by proponents of free schools and Academies) mean local Councils will have to buy land to build more schools. I don’t see groups of right-minded but muddle-headed parents stumping up £1.5 million to buy a site for a new school let alone funding its construction.

No one has also explained to me what would happen IF an Academy suffered a fire and its buildings were lost – who would replace them? The local authority, the Academy Trust – as with other Government proposals, the ideological desire to improve education (entirely laudable) fails to appreciate the more practical considerations and the ideology allows public money to be squandered and public land and buildings to be given away.

Indeed, looking at a map like the one on the DCLG website serves only to increase incomprehension rather than improve and inform. Eric Pickles (the George Whitebread of this Government) also puts ideology in front of informing the public debate. Whether it’s through the use of God or the use of ideology, politicians who fail to inform the debate and pander to misconceptions and prejudice deserve to fail.

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