Supplementary memorandum by English Partnerships
Q1: Additional Questions about the information
provided in Appendix 1, Tables 1, 2, and 3
Please provide by town, in hectares and values:
land split by employment/housing
housing land split by greenfield/brownfield
Section 7(1) approvals split by employment
and housing and greenfield/brownfield
This information is appended at Supplementary
Tables 1, 2 and 3.
Q2: Please explain how the clawback provision
held by English Partnerships works, with examples.
Q2.1 The new towns were developed at no
cost to each local authority through a series of central government
loans to development corporations. As community centres, schools,
parks, playing fields and open space are completed they are transferred
to the local authority (or other appropriate recipient body) as
a "Community Related Asset".
Q2.2 The majority of Community Related Assets
(CRAs) are endowed with money or income-producing property at
the time of transfer to ensure the effect on the recipient is
fiscally neutral. If the recipient then develops the land for
a commercially more beneficial use, the community benefit of the
asset is lost but the local authority saves maintenance costs
and can retain the endowment. Treasury advice, in the form of
Financial Guidance to English Partnerships, requires English Partnerships
to clawback a fair share of the uplift in value for return to
the taxpayer by whom the original benefit was provided. With regard
to income-producing property transferred in order to balance the
cost of maintaining public assets, this income stream is not hypothecated;
local authorities and other recipients may dispose of these for
a capital sum unaffected by clawback or other restriction.
Q2.3 Clawback is therefore a Treasury required
mechanism whereby the monetary value of local amenities, provided
from the public purse, can be protected for the benefit of the
public sector. Contractual clawback arrangements, however, can
act as a disincentive to Local Authorities to dispose of Community
Related Assets which have been provided as an integral part of
each town and neighbourhood.
Q2.4 "Qualifying Events": Change
of use or a sale which removes the asset from public benefit incurs
clawback payable to EP at the rate of 100 percent of the proceeds
in the year following transfer, reducing thereafter at a specified
rate per annum. A typical annual rate for public open spaces
is two percent per annum. A public park transferred to a local
authority in 1992 with an endowment (generally 15 times annual
maintenance costs) and sold in 2002 would generate 20 per cent
income for the local authority and 80 per cent income for EP.
Q2.5 English Partnerships already approaches
the DTLR for the waiver or removal of clawback where that is helpful
to an individual new town in light of the circumstances of a particular
development. When considering area-based regeneration schemes,
for example, it is sometimes appropriate to make use of Community
Related Assets in order to bring about a change for the better.
In these instances, English Partnerships encourages dialogue in
order to find the most cost effective means to progress the regeneration
plans. For instance, English Partnerships is actively seeking
to make use of clawback in a constructive way by working with
the local authorities, housing associations and the Housing Corporation
to re-invest the value of clawback into estate renewal. In Basildon
and Telford work is well underway to achieve this outcome.
Q2.6 There are generally three kinds of
clawback in operation:
(a) Community Related Assets (CRAs): Parks,
Open Space, Amenity Land, Schools, Community Centres
The freehold of amenity land is transferred
to the recipient at nil cost accompanied by an endowment of cash
or balancing property assets. Amenity land, highway verge, land
under highways, etc forms a diverse portfolio and these sites
are usually grouped into "parcels" negotiated with the
local authority or other recipient. The value of the endowment
required to "balance" the parcel must also be agreed
with the recipient. Cash endowments and property assets are not
hypothecated. Receipts from sales of balancing assets are unencumbered
and may be used as the recipient's own policies dictate.
English Partnerships recently completed a CRA
transfer to West Lancashire District council in relation to land
in Skelmersdale. The Transfer parcel totalled about 21 hectares:
17 hectares of land at White Moss and some 60 separate sites totalling
4 hectares. These last four hectares were supported with an endowment
of £274,000; the land at White Moss is subject to agricultural
license and adjacent to land controlled by the Council. The Council
wished to control the use of the land at White Moss and required
no balancing endowment for these 17 hectares. Standard clawback
applies at the rate of 100 per cent uplift in value in year one,
reducing at the rate of 2 per cent per annum in future years.
There are no restrictions on the use of the endowment.
Sites for the provision of education are transferred
to the local education authority at nil cost for the sole purpose
of education. Although there have been many forms of agreement
for schools over the years, there is now a general prohibition
of alternative uses for 10 years; a requirement to pay English
Partnerships 50 per cent of the proceeds of sale is also imposed.
This is done by means of a covenant attached to the freehold at
the time of transfer. English Partnerships will seek to help the
local authority to make best use of redundant or under-used assets
where clawback acts as a disincentive to such action. In Peterborough,
for example, the Ellendon Road primary school no longer requires
some of the land associated with the school. English Partnerships
has released the covenant in order for the land to be used for
(b) Public Sector Housing
The transfer of former Development Corporation
Housing was undertaken in the majority of cases under the terms
of the Local Government and Housing Act 1989. Transfer contracts
for each Development Corporation vary to some extent but generally
the recipient landlords paid a "tenanted value" for
each property which they received following the tenants' choice
ballot. A typical price in Milton Keynes, for example, was £6,000
per unit. If the tenant exercises the right to buy, the recipient
landlord calculates the right to buy price, less tenant's discount,
and deducts the purchase price paid (ie £6,000) from the
proceeds along with an allowance for administration and legal
costs. The remainder of the price paid by the purchaser, if any,
is returned to English Partnerships. These arrangements are time-limited,
extending for up to 25 years after transfer.
This form of clawback may act as a strong disincentive
to local authorities seeking to undertake stock transfer for major
repair or regeneration schemes. English Partnerships has therefore
invited all local authorities considering stock transfer to discuss
the impact of clawback on their plans. In Telford, for example,
the housing was transferred to a housing association without any
action to receive clawback by English Partnerships because this
was not deemed to be a Qualifying Event under the terms of the
transfer contract. Reinvestment of clawback for public benefit
is English Partnerships' preferred option. DTLR (and possibly
Treasury) approval is required in each instance where English
Partnerships would seek to waive significant clawback.
English Partnerships and the Housing Corporation
have recently agreed, in principle, a joint approach in the case
of housing association sales to tenants under right to acquire
legislation whereby the clawback is reinvested in affordable housing
by the RSL in their own Disposal Proceeds Fund.
(c) Clawback or Covenants on Private Sector
Clawback is imposed on some private sector developments
to protect a restricted use such as care homes or facilities for
people with special needs. It is imposed for a maximum of 21
years at a minimum clawback of 50 per cent. In Peterborough, for
example, the mobility bungalows provided by Minster General Housing
Association Ltd are required to be used for that purpose only.
A change of use would act as a Qualifying Event and clawback would
Some of the land associated with HM Prison Woodhill
in Milton Keynes, owned by English Partnerships, will be used
for the provision of a secure training centre. The Home Office
will procure this by way of a Private Finance Initiative. English
Partnerships will transfer the freehold to the private sector
provider with an absolute clawback of 75 percent of the proceeds
should the site change use in the future. Should the project not
proceed, English Partnerships retains the right to re-acquire
the site at the price paid.
Q3: How many hectares in each town are
covered by clawback provision and covenantssplit by vacant
Q3.1 Clawback is applied to individual and
groups of small community related assets and English Partnerships
keeps a record of these. Clawback arrangements are recorded in
numbers of clawback arrangements per town, hectares per town covered
by clawback arrangements and numbers of restrictive covenants.
A table to this effect is given in the Appendix at Supplementary
Q3.2 Sales to sitting tenants are not kept
as a running total but English Partnerships estimates that approximately
20,000 houses in local authority and housing association ownership
are still covered by clawback arrangements; the overwhelming majority
of these are in Milton Keynes. The local authority's decision
to sell property or change the use of a public amenity is an unplanned
event and each instance is considered as it arises. English Partnerships
has Ministerial approval to waive its clawback proportion up to
£1,500 for low value transactions such as sales of garden
Q4: Looking at disposals since 1992,
how many disposals (covering how many hectares) have been made
at less than the highest price or less than the highest use value
for the land, because a lower value disposal took greater account
of the interest of the people living in the town?
Q4.1 All disposals at less than best consideration,
or which include special circumstances, require English Partnerships
Board approval and DTLR consent. Lower value disposals (for health
care, affordable housing, etc) which reflect the land use are
considered to be the best consideration for that use. In order
to identify all transactions undertaken to further the benefit
of the community, it is necessary to check every transaction since
1992. This would have required a substantial amount of staff time;
however, a brief description of the policies, which inform decisions
about disposals, may be more useful. All sites are sold as serviced
(a) Affordable Housing: Disposals to Registered
Social Landlords are always at very low value or nil cost in order
to maximise the resources available for new build. Houses range
in price from low cost sale through shared ownership and public
sector rent, appropriate to local need. For example, English Partnerships
had agreed a scheme by Chiltern Hundreds Housing Association in
Milton Keynes to provide 40 affordable rent and 42 shared ownership
homes on 1.57 hectares at a total land value of £320,000;
this equates to about £212,000 per hectare. Residential land
values in Milton Keynes, for private sector development, are in
excess of £2.3 million per hectare.
(b) Health and Education: In light of NHS
changes to the methods of GP surgery procurement, land value is
determined by a "value-less-cost" approach which directly
relates to the use of the land. This is likely to be much lower
than the alternative residential use. The sale of a 0.53 hectare
site for the provision of a GP surgery in Milton Keynes was recently
approved at a land value of £200,000, which is 20 per cent
of the open market value.
Q6: Could you send us a disposal strategy
and profile of the forecast receipts, by town?
English Partnerships' Corporate Plan would normally
provide this information; however, pending DTLR's advice on how
to proceed following the conclusion of the Review, strategies
are only in draft form. We will make this information available
to the Sub-Committee once a clear indication of the way forward
is given by DTLR and Ministers have agreed the basis for our new
Q7: When do you anticipate that disposal
of assets will be complete?
This is entirely dependent upon the timing and
outcome of Stage Two of the Review, since English Partnerships
does not yet possess the information necessary to produce an estimate.
Q8: When CNT was established, what was
its estimated life?
CNT was established in 1961; its life was to
be as long as required by the Secretary of State, as specified
in the New Towns Act 1981, until: "it appears to the Secretary
of State that the purposes for which the Commission exists under
the Act have been substantially achieved".
Q9: What type of joint venture do you
envisage will be supported in future? What would be their scope
and spatial scale?
Q9.1 Two examples would be helpful here.
In Milton Keynes the proposed joint venture with Milton Keynes
Council aims to develop Central Milton Keynes over a 30-year period
and covers about 40 hectares of development land. It sets out
how both organisations will share responsibility for investment
in transport and the public realm, how we will share the uplift
in value arising from increased activity and development density,
and links that uplift to regeneration schemes to the north and
south of Central Milton Keynes.
Q9.2 In Northampton, a joint venture with
private sector developer, Wilcon Homes, sets out how costs will
be shared and enables the inclusion of redundant NHS property,
some of which is suitable for the provision of community facilities;
this land extends to about 72 hectares. English Partnerships'
land extends to about 258 hectares.
Q9.3 The spatial scale of each future arrangement
cannot be pre-determined, but will evolve to include the optimum
for efficient and effective delivery of outputs.
Q10: What type of regeneration role will
English Partnerships have in relation to the New Towns in future?
Are they being considered as target areas for regeneration activity?
Q10.1 This is dependent upon the outcome
of Stage Two of the Review, but if English Partnerships concentrates
on strategic projects its input in new towns and other local authority
areas will be determined on consistent criteria: ie, new towns
will no longer be treated as a special programme.
Q10.2 The Stage One announcement regarding
the Review of English Partnerships gave a clear indication of
how we would progress our new role in the new towns. English Partnerships
is able to take a strategic role in the regeneration of brownfield
land and the responsibility to deliver socially and economically
sustainable development and renewal. Millennium Communities in
Milton Keynes and Telford, the Urban Regeneration Company in Corby,
regeneration and renewal of Castlefields in Runcorn, sustainable
town extensions in Northampton and Basildon and town centre strategies
for Telford and Milton Keynes are all the types of projects we
would expect to undertake in the new towns in partnership with
the local authorities and appropriate regional development agency.
As we discussed in our Memorandum, the new towns are highly relevant
to the Government's agenda for sustainability and economic growth
and English Partnerships has a role to play as a key partner,
investor and enabler of that development.
Q11: Have any evaluation studies been
carried out, either on individual New Towns or the New Towns Programme
as a whole since 1992? If so, please could you provide us with
To our knowledge no studies have been carried
out on the New Towns Programme as a whole. Professor Colin Ward
published a critique entitled "New Town Home Town" in
1993 and The Planning Exchange holds a library of information
on new towns. Some new town local authorities participate in the
European New Towns Platform (Forum) through which they share experience
and consider issues of common concern. The Platform is currently
drafting a submission to European Union on the value of New Towns
in the future development of Europe, especially with regard to
the nation states waiting to join.
Q12: What type of new partnerships do
you envisage developing with the Housing Corporation and regeneration
bodies in the New Towns? How do you see these partnerships developing?
Q12.1 We are currently finalising details
of a Memorandum of Understanding with the Housing Corporation,
which describes how we will share programmes and expertise. It
explores how we may be able to address regeneration issues together
strategically especially when dealing with older, run-down housing,
to demonstrate best practice and secure maximum benefit for the
Q12.2 When invited by the local community,
English Partnerships is an active participant in Local Strategic
Partnerships and sub-regional economic partnerships. In Telford,
English Partnerships is working closely with Telford & Wrekin
Council to secure the objectives of the community plan and the
Local Strategic Partnership in Milton Keynes has recently extended
a formal invitation to join them. We offer financial and professional
support to the work of the Greater Peterborough Partnership and
other local agencies in the East of England, to name but one region.
We already work with RDAs to deliver their priorities at local
level, the Omega project in Warrington being an example.
Q12.3 English Partnerships envisages making
a continuing contribution to the new towns through continuing
to put into practice those principles established in the new towns:
a long-term, master plan approach which will deliver balanced
communities capable of sustaining themselves into the future.
We aim to work with our more local partners to deliver area-based
development and renewal strategies to achieve the town's aspirations
for the future. We also aim to support towns of wider regional
and inter-regional importance through a programme capable of delivery
in the longer-term when English Partnerships' expertise and contribution
may no longer be required. This approach is based on working with
our partners as equals and moves completely away from the paternalism
of the past.
|Greenfield and Brownfield
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|*Less than 0.5a.
|Greenfield and Brownfield
|Welwyn Garden City||22||1,664
|* Less than 0.5ha
Q1 AND Q2
English Partnerships provided three tables of data with the
Memorandum to the Committee:
Table 1 detailing land sales, cash receipt and payment for
the years April 1996 through March 2001;
Table 2 listing land assets as at the annual valuation of
31 March 2001; and
Table 3 listing development land with S.7(1) approval as
at 31 August 2001.
The following notes are in clarification of data provided
here in response to Supplementary Questions of the Committee dated
27 March 2002.
1. The tables describe land held for employment and residential
development; they do not include land held for other purposes.
English Partnerships owns land allocated for uses other than employment
and housing, for example open space, roads etc. Therefore, the
total land shown in the above tables will not agree with the total
hectares in Table 2.
2. The data reflects transactions completed in the latter
half of 2001-02. Therefore, the 7(1) totals shown in the above
tables will not agree with the information previously provided
in Table 3 which was based on data as at 31 August 2001. Land
Subject to Building Agreements has been included within the column
"Remainder" because the S.7(1) authorisation has been
3. The land values mainly reflect the annual valuation
of assets as at 31 March 2001 to accord with the values in Table
2. However, certain sites in Telford have moved forward in planning
terms and the values have been enhanced to reflect the increased
development potential. The variance in the land valuation for
Milton Keynes between Table 2 and the above tables is mainly due
to the accounting treatment of deferred plot sales. The reduced
value for Northampton has resulted from the disposal of an employment
site valued at £11.6 million.
4. As a result of the impact of the Housing Direction
2000, the value of the greenfield land allocated for housing has
fallen considerably and the reduction in value will be reflected
in the annual valuation of assets as at 31 March 2002.
OVERVIEW OF ALL CLAWBACK AND COVENANT ARRANGEMENTS BY
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