rural sovereign wealth fund

MoD loses billions of pounds after selling military housing, NAO finds

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I admit it. It was my experience of the bit of this deal in terms of RAF Scampton that in part led me to prepare the note on the need for a rural sovereign wealth fund.  I hope in the light of this story you might read it again and help me build interest in a better way forward – you can access it here.

This story itself tells us:

Had the MoD retained the housing stock, due to the property price boom, it would have stood to gain between £2.2 billion and £4.2 billion, the watchdog concluded in a report out today.

The MoD sold the homes, used to house members of the armed forces, to Annington Property Limited, in a deal worth £1.6 billion in 1996.

Since then, the MoD has been renting the homes back from Annington in a deal that is set to be renegotiated in 2021.

Amyas Morse, head of the National Audit Office, said today: “The department carried out a sale and leaseback deal almost twenty years ago, based upon pessimistic views of the future growth in property values, but with the mitigating feature that the rents charged to the military families who lived there were restricted for the first twenty years.

“This has cost the public sector a great deal in capital growth, and it has been a great deal for the landlord.”

When the current agreement ends in 2021 Annington Homes is expected to demand a huge increase in rent.

Currently, the MoD pays £178m a year in rent, with a discount rate of 58%, but this could rise by £250m a year when the current deal ends.

Tackle UK’s north-south divide with pledge on infrastructure, say experts

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Never mind north/south – what about urban/rural – I think its time to blow the dust off my idea of a rural sovereign wealth fund – this article tells us;

Britain’s north-south divide should be tackled by a government pledge in its new industrial strategy to provide every citizen with decent transport, schools, hospitals and digital access, an expert body says.

The independent industrial strategy commission on Wednesday urged ministers to tackle Britain’s regional imbalances by committing to universal basic infrastructure – a guaranteed standard for the whole of the UK.

Theresa May put an industrial strategy high on the agenda of the administration she formed following last year’s Brexit vote, and put a green paper out for consultation in January. A white paper is expected from the Department for Business, Energy and Industrial Strategy before the end of the year.

The commission was set up following the publication of the green paper and in its final report said that while an industrial strategy could not do everything everywhere it should seek “to do something for everywhere”.

Dame Kate Barker, the chair of the commission, said: “The UK’s people, places and industries have great strengths and untapped potential, but we must accept the reality that the economy also contains many long-established weaknesses.

“Industrial strategy needs to be embraced as a long-term plan to manage the economy strategically and embedded throughout government. If we get the new strategy right it can build on these strengths, tackle our weaknesses and above all have a positive, long-lasting impact on people’s everyday lives. This implies that sometimes it will be right to choose equity and long-term-gains over short-term efficiency.”

A joint initiative between academics at Manchester and Sheffield universities, the commission said the new strategy should be driven by the long-term needs of the UK – to decarbonise the economy, to improve infrastructure and to boost export capacity, to unlock long-term investment and to ensure a sustainable health and social care system

Cabinet Office opens sixth funding round of One Public Estate

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I wrote an article a few months ago setting out the case for a rural sovereign wealth fund as a post Brexit means of putting rockets under this programme in rural areas.

Here is some more information on that score. The article tells us:

£54m package to enable councils to release unused or surplus land for housing has today been launched by the DCLG in partnership with the One Public Estate (OPE).

The government will provide £45m of the cash through its new Land Release Fund, and will work with the OPE – a partnership between the LGA and the Cabinet Office – to invest the remaining £9m of the money through the scheme’s sixth funding round.

It’s hoped that the cash will drive forward councils to release enough land to build at least 160,000 properties by 2020.

Local authorities have been invited to bid for the funding to support land remediation and small-scale infrastructure – bringing sites forward for housing that otherwise would have not been available for new homes.

Via the OPE, councils are also being asked to think about projects centred around co-location, property consolidation and smarter working in order to make government estate more efficient. Speaking to PSE shortly before the fresh round of the programme was launched, its programme director at the LGA, Brian Reynolds, said he hopes at least another hundred co-locations between local and central government are rolled out by 2020.