Councils encouraged to sweat billions from assets
Tue 25th September 2012, 5:17 pm
Local authorities could make more than £50 billion over the next decade by using their assets to create income streams, according to a new report.
The report, from think tank New Local Government Network (NLGN), says that a revenue of just 1% to 2% from the £250 million local government asset portfolio could provide a major revenue stream.
The report also found that the price achieved from the sale of regional development agency assets indicated that the Treasury is undervaluing local authority assets.
It said: “The regional development agencies achieved a net profit of £3.7 million through property and land sales in 2011, or 7% above the book value of these assets."
Simon Parker, NLGN director, said: “It’s crucial that we unlock the power of local government’s assets to drive growth and create jobs. At a time when the property market is flat, councils shouldn’t be selling off the family silver but using it to generate returns for the public purse.
"A more commercial approach could unlock billions of new investment.”
The report mentioned local asset backed vehicles as a key way of obtaining value from property assets.