By Joe Locker, Local Democracy Reporter
Nottingham City Council has sold off property assets totalling £64m over the past four years.
The selling of property is being done under what the council calls the ‘Asset Rationalisation Programme’, as part of plans to improve its finances.
According to documents published ahead of a Housing and City Development Scrutiny Committee on January 22, a total of £64.1m has so far been raised through the scheme.
“The Asset Rationalisation Programme is intended to ensure best value through the use of the council’s assets, by using strategic planning and analysis to determine the best use of property and identifying assets potentially surplus to requirements,” documents say.
“In doing so, it is aimed to generate sufficient capital receipts by selling property assets to meet the current commitments within the capital programme and reduce the council’s level of borrowing.
“The strategic assets and property team has accelerated the review of assets
and disposal of assets over the past two years, with £64 million in receipts being achieved.
“The emphasis going forward is on accelerating the process in line with the council’s financial requirements.”
Following the collapse of council-run Robin Hood Energy and the resulting appointment of an improvement board, the Labour-run council adopted a “voluntary debt reduction policy”.
It was recognised debt was too high and the council decided to cease all borrowing for capital investments.
Instead, new investments are paid for through Government grants, such as Levelling Up money, or the selling of surplus property it no longer needs.
Back in 2020/21 the council had anticipated to secure £11.9m from property sales, but ended up achieving £12.9m.
This improved in 2021/22, when it was forecast to bring in £7.9m but ultimately sold £17.8m-worth of property.
The following year the council expected to sell assets totalling £33.8m, but ended up making £25.1m.
Targets were missed largely due to the council’s failure to sell certain high value assets, including the Guildhall.
Similarly the former Central Library building in Angel Row failed to sell because the firm that wanted to buy it “did not come through with the money”, councillor Steve Battlemuch (Lab), who looks after property, previously said.
So far this year (2023/24) the council has sold £8.40m-worth of property on a target of £13.6m.
“This year’s target is expected to be met due to an additional £1.8 million in the
current pipeline still expected to complete and an additional 18 properties which were approved to go to auction in January and February 2024,” documents add.
The council says increasing the number of assets in the pipeline is “crucial to maintaining a sustainable flow of capital receipts”, particularly in light of its financial challenges.
At the end of November last year a Section 114 notice was issued, effectively declaring bankruptcy, over a £23m in-year budget gap.
Cuts are also being proposed to jobs and services amid a £53m gap in the year beginning April 2024.
To help meet targets the authority says it is reviewing more assets, including nine farms and 90 operational estate properties.
The total amount in the pipeline is an additional £74.3m-worth of property up to 2026.
