Public sector land & public subsidy
Public Sector land/property which is surplus can be sold or transferred at market value to another public sector body for the provision of social housing.
Public Sector Land for Social Housing Development
Land / property suitable for housing use may be made available from Government Departments and Non-Departmental Public Bodies (NDPB).
There are specific procedures to be followed by Public Sector Bodies in disposing of surplus land or property. However, one important exception is the ability to transfer the land/property to another Public Sector Body - or to another suitable body such as a Housing Association - acting on behalf of the Public Sector Body.
The transfer of Public Sector land/property to Housing Associations for the provision of social housing for rent is considered to be within the guidelines. Land & Property Services act as a clearing house for public sector land declared as surplus to requirements and NIHE (DPG) manage the Housing end of the process.
Further information on the process used to transfer land from a Public Sector Body etc, is contained in a document titled ‘Disposal of Surplus Land and Buildings by Public Sector Bodies’, available at Land & Property Services
(NB: click on Agency’s publications; Property Asset Management Disposal; then Disposal of Surplus Public Sector Property; and then click on the document).
The Public Sector Body receiving the land/property, or ‘sponsoring’ the transfer to another suitable body, must:
- have proven strong and exceptional reasons of public interest for the transfer
- be able to demonstrate immediate need e.g. included in the Social Housing Development Programme (SHDP) and
- have compulsory acquisition powers for the purposes for which the land is required
Public Sector land is acquired by Associations by one of two methods: Transfer; or Sale.
Public Bodies in Northern Ireland are not permitted to donate land, and any land/property must be sold or transferred at the market value. Generally the transfer of surplus land must comply with the Stormont Regulation and Government Property Act (NI) 1933, which states that any sale, exchange or lease of land must be ‘at the best price…’ It should be noted that land transferring or sold by a public sector organisation to an Association must be valued at market price using RICS ‘Red Book’.
See the following links Acquisition Issues & Valuations and Managing Public Money Northern Ireland Accountability & Accountancy Services Division for further information.
Associations should note that the land can only be used for the purposes agreed at the outset and restrictions exist on other uses or the transfer of any or all of the land/property to others (Note: the exception to this being the Right to Buy).
Transfer of Surplus Public Sector Land/Property
In some cases special arrangements exist to allow surplus land to be transferred without the Association having to make direct payment and for the NIHE (DPG) to deduct the cost as a Public Subsidy from any Grant due to the Association. This type of transaction is commonly called a ‘book’ transfer and is currently used in respect of NIHE land transfers. Since NIHE and Housing Associations both fall within this Department's responsibility direct payment is not required.
Sale of Surplus Public Sector Land/Property
The procedures outlined in respect of the surplus public sector land must be adhered to and the nominated association must ensure it proceeds to timely purchase of the site which has been made available. The primary difference in this route from transfer schemes is that direct payment is made by the Association to the disposing Public Body. Therefore, when identifying the scheme costs for approval consideration, the acquisition costs are treated as an acquisition on the open market not as public subsidy.
Public Subsidy
There are circumstances where Public Subsidies are regarded as deductable from the assessed amount of HAG funding available for a housing scheme. This situation arises where an award of grant funding or the assessed value of an asset or service contributes to/ or subsidises eligible qualifying scheme costs. Incidences of public subsidy, for the purposes of calculating the applicable grant, are listed in the table ‘Guidance on treatment of public subsidy' which can be accessed by the link below. Associations are responsible for identifying the total scheme costs and declaring all available public subsidy (whether deducted from HAG or otherwise) for consideration at scheme submission stage. The most common source of public subsidy for Housing Associations arises where the acquisition of the land is paid in advance by way of the Advance Land Purchase (ALP) facility. The approved ALP grant is treated as a public subsidy which is subsequently deducted from the capital grant calculated as payable to the Association at full scheme submission stage. This ensures the Association is not receiving double funding from public funds for the same item.
For more information: