From 1 June, new Regulations will come into force allowing local authorities in certain circumstances to dispose of land for less than "best value" without requiring the prior consent of the Scottish Government.
The requirement to obtain a monetary best value can sometimes frustrate a development which would otherwise be economically or socially advantageous to an area, or to the people of an area.
The new Regulations give local authorities the ability to dispose of land for a consideration which is less than the best that can reasonably be obtained if it is satisfied that a disposal for that consideration is reasonable, and that the disposal is likely to contribute to the promotion or improvement of:
- economic development or regeneration;
- health;
- social well-being; or
- environmental well-being.
The local authority must also "appraise and compare the costs and other disbenefits and the benefits of the proposal".
In addition, and separately, the prohibition on disposing at less than best value does not apply:
- where the best value of the land is less than £10,000; and
- where the consideration being paid for the land is not more than 25% lower than the best value figure (e.g. selling land valued at £100,000 for £75,000).
Commentary
The key question is how much below best value will a local authority be entitled to accept when selling land required for a project of benefit to an area? As it is entitled to accept a 25% discount without having regard to the assessment criteria set out in the Regulations, it must be the case that a greater reduction will be acceptable if the criteria are met and no lower limit is set out in the Regulations.
However, while these Regulations may well introduce more flexibility for local authorities, with that flexibility comes a greater risk of challenge, for example by way of judicial review. Any decision of a local authority to, in effect, self-certify its disposal of land for less than best value will have to be carefully considered and documented.
The Disposal of Land by Local Authorities (Scotland) Regulations 2010 can be viewed here.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
