Brown to sell off £30bn assets

GORDON Brown has discovered the keys to a £30bn treasure chest of underused Government assets which he plans to sell over the next five years.

That will push Labour's privatisation proceeds to a level comparable to the great Tory privatisations of the Thatcher-Major years.

Landmark central London properties such as Somerset House off the Strand could be sold in the purge, which the Chancellor unveiled in a single paragraph of his spending review.

This will bring Labour's total sales of Government property to £60bn. It has already raised £30bn from disposals, mainly of Ministry of Defence land and buildings, after compiling a Domesday Book of what it owned.

The total comes close to the proceeds of 20 years of Tory privatisations under the Thatcher and Major Governments. Between 1977 and 1996, privatisations such as BT, British Gas and the water and electricity industries brought in more than £60bn.

The new property sale prospects have been unearthed in civil service reforms drawn up by Sir Peter Gershon and Sir Michael Lyons.

Going under the hammer are city centre car parks used by a handful of Whitehall mandarins, while the merger of the Inland Revenue and Customs & Excise will free up a number of sites for sale. Plans are in train to force other government departments to share offices.

According to the Royal Institute of Chartered Surveyors (RICS), what Brown intends to sell amounts to about one quarter of central and local government assets.

He wants to offload them by 2010, a tight deadline for such a massive disposal programme.

Michael Chambers, head of policy at RICS, said the Government might end up flooding the market with cheap land and buildings, threatening its ability to realise top dollar.

'The process creates intense pressure to dispose of assets, particularly if it is built into Government spending plans,' Chambers said.

'We will have to see how the figures stack up, but disposing of such a vast block of central Government assets raises more questions than it answers.'

Property companies were last night rushing to offer their expertise. British Land, one of the City's top developers, said: 'We have a great deal of experience in sale and leaseback, running property joint ventures and securitisations. It is a given that we would be interested. It is British Land's bread and butter.'

Gershon's review of public sector efficiency plans to cut 84,000 civil service jobs by 2007-2008, which with better purchasing should save £21.5bn a year.

The Chancellor accepted Gershon's recommendation that any further cuts would put 'front line' services at risk.

Health and local government are expected to yield £6.4bn of efficiencies each, while Gershon reckons £4.4bn is being wasted by the education department.