Source · Select Committees · Public Accounts Committee
Recommendation 18
18
Accepted
We questioned the Cabinet Office about how current turbulence in the property market may affect...
Conclusion
We questioned the Cabinet Office about how current turbulence in the property market may affect this target.46 The Cabinet Office acknowledged these risks, particularly surrounding valuation. It assured us it would seek appropriate professional advice and there would be no fire sale of assets.47 The Cabinet Office also explained its approach to disposals, asserting that it can protect itself from some market turbulence. It argued there was relative security in selling off lots of small parcels of lands, as opposed to a few big, expensive properties that might fluctuate more widely in value.48
Government Response Summary
The government agreed with the Committee’s recommendation and will write to the Committee with information on how it intends to reach its property disposal target by April 2023.
Government Response
Accepted
HM Government
Accepted
5. PAC conclusion: It is unclear how the government will meet its target for property disposals, given the past struggles of such programmes and current market uncertainty. 5. PAC recommendation: The Cabinet Office should write to us by April 2023, setting out how it intends to reach its property disposal target, including: • KPIs; • milestones; • disposals targets for each portfolio; • how it is monitoring compliance from all departments; • and how it is ensuring value for money during market fluctuations. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: end March 2023 5.2 The Cabinet Office will write to the Committee with this information by April 2023. The Cabinet Office has commissioned departments to produce a forward look (pipeline) of their planned disposal activity to 2030, and these pipelines will be refreshed periodically. This will enable the Cabinet Office to analyse, report on and monitor disposal plans, setting relevant programme performance indicators and measures to do so. Disposal plans will form part of the wider property efficiency conversation that departments will have with HM Treasury during the Efficiency and Savings Review, and the merit of setting targets will be determined during that exercise. 5.3 An updated version of The Disposal of Government Property (Real Estate) guidance will be published in 2023 to align with current government priorities. The guidance provides disposal best practice advice and the technical processes to be followed to ensure Best Value is obtained in any disposal. This includes documenting the objectives driving the disposal, and from those to determine, with professional valuation advice, the most appropriate disposal strategy and method of sale. Departments should consider the implications on the disposal strategy of a weaker or uncertain market, including whether setting provisions to benefit from increases in value after disposal through overage or clawback, or the potential for partnership or profit sharing arrangements are appropriate.