The Department has now concluded its review of BRB (Residuary) Ltd’s (the Company) property activities in the light of the latest guidance from the Office of Government Commerce on property disposals and on wider developments in the rail industry following the passage of the 2005 Railways Act.
This revised guidance is intended to confirm and expand the guidance given to the Board on 7 October 2005.
The Secretary of State, as the shareholder of the Company required the Company to establish an autonomous Property Review Group (the Group). Members of the Group are appointed by the Board following consultation with the Department. In making decisions the Group should exclude any consideration they may have as Directors of the company which may conflict with this guidance.
The purpose of the Group is to determine whether to authorise the release for disposal of land owned by the Company in the context of applicable Government policies, particularly those relating to the promotion of sustainable transport and to determine any conditions.
Before authorising the release for disposal of land on the open market, the group should consult with the rail industry, the Department for Transport, the relevant devolved administrations, local authorities and regional planning bodies. The purpose of the consultation is to ascertain whether any of these bodies have a need or desire for the land in question to be used to further the objective of contributing to the development of an integrated transport system, including any community rail development policy or alternative transport use.
In assessing whether there is a realistic prospect of rail or other integrated transport use in the foreseeable future the Group should require a rigorous cost benefit appraisal, where appropriate, of the transport potential of sites. It should also weigh carefully the risks of blight and lost development opportunities, including achieving other Government objectives such as making Brownfield sites available for development.
With the growing devolution of responsibilities following the passage of the 2005 Railways Act, the Group should look to the rail industry, devolved administrations, local authorities or other bodies to acquire sites where they have identified a future rail, integrated transport or brownfield site development opportunity. The Department now believes that it is reasonable to expect a body that has identified such an opportunity to bear the holding costs of the land as quickly as possible. In addition, the Department believes that it is appropriate for the Group to set appropriate time limits for such bodies to acquire such sites in the light of this guidance. The Department considers a period of 6 months from a formal offer of sale from the Company to such a body would in most circumstances represent a reasonable time frame. Should acquisition (or substantial steps towards acquisition) not have taken place within this time frame it is at the discretion of the Company to release the property for disposal on the open market.
In disposing of sites the Company is normally expected to achieve the best consideration reasonably obtainable, including when disposing of sites to other public bodies. Where the Group has determined that sites should be disposed of for the promotion of sustainable transport it may also direct that the Company take this into account. In doing so, the Group should ensure that the valuation of the cost benefit of such a disposal takes full account of any alternative sources of funding and secures value for money.
Finally, the Company should take all reasonable steps to ensure that where a purchaser acquires a site for rail or other integrated transport use they will not then be able to maximise the development value of the land for another use.