By Matt Jarram, Local Democracy Reporter
Nottingham City Council plans to generate £100 million from the sale of ‘under-utilised land and buildings’ within three years.
The Labour-run authority has been warned by the Government it needs to reduce its debt, which stands at just below £1bn.
If improvements are not made then the Secretary of State for Housing, Communities and Local Government could call in Government commissioners to run the authority.
The council wants to reduce its reliance on borrowing, so has decided to sell off property which includes ‘former school sites and office buildings’ to generate some capital.
But the council’s Conservative opposition leader says there are concerns council assets could be sold off below market value to make quick cash, rather than get the best deal for the taxpayer.
A publicly-available delegated decision from July shows the council sold Crocus Place in Arkwright Street. It outlines how the land went for ‘under-value’ so a seven-floor office building could be built.
It defended the decision as “the site is currently vacant and occupies a prominent position on one of the key gateways into the city – the proposed development of a Grade A office building will improve and add to the regeneration of the area”.
The council rejected plans to dispose of the site on the open market for residential use, which would have generated the highest amount of money.
It stated this would “deliver limited economic outputs to the city”.
However, the decision makes no mention of the sale helping to reduce reliance on borrowing. Instead it mentions the sale helping to speed up regeneration in the area.
Cllr Andrew Rule (Con), leader of the Conservative Group, said: “It [Crocus Place] begs the question what are they doing with the rest of it.
“The Secretary of State wants to see they are taking his concerns seriously and I do not think selling properties at under value will alleviate these concerns.
“They should not be selling off property at under value. They should be selling it at maximum value.”
The council is now planning to review all of its ‘under-utilised’ assets – land and buildings – with the aim of generating at least £100m of asset sales within three years.
When asked, the authority refused to release a detailed list of potential properties for disposal due to ‘commercial sensitivity’ saying it could prejudice its ‘ability to achieve best value’.
But the council did explain former school sites and office premises are the type that are being classed as no longer needed.
Councillor Sam Webster (Lab), lead for finance, said: “The receipts from asset sales enables the council to fund other capital investment projects such as transport infrastructure and new council housing.
“Asset sales allow us to continue with our ambitions for growth, improvements and creating more new jobs for Nottingham people without increasing our debt levels.
“We are reviewing the use of all our properties to make sure we are optimising how we use them so we aren’t holding multiple properties which bring ongoing maintenance costs with them.
“Selling them ensures that every taxpayer pound is working as hard as possible for the benefit of local people.”
Cllr Webster said the council will also be ‘reviewing company structures’ in organisations it owns or part owns.
He said: “We have committed to review company structures to make sure they are providing good value for money and that they are continuing to provide good public services for Nottingham people.
“Nottingham City Council owns or part-owns a number of highly successful and vitally important local organisations including Nottingham City Transport, Nottingham City Homes and the National Ice Centre.
“The review process is to allow independent experts to report back to the council to make sure we have the most appropriate and most efficient company structures in place.”
