Politics: Ministers failing to sell off assets

THE Social Security Department is paying more than pounds 1m in commercial rents for empty property but it is one of the Whitehall departments which is accused of dragging its heels in selling surplus assets, which could blow a pounds 5bn hole in the Chancellor's Budget plans.

The Treasury has had a slow response to its demands for all Whitehall departments to identify land and buildings for sale in spite of evidence in a series of Parliamentary questions showing that property worth more than pounds 70m is officially declared as empty. Sales could have eased the pressure on the Treasury, which is threatening to continue with Tory spending controls for the next three years, virtually doing away with the annual spending round.

The Lord Chancellor's office has included the former Home Office creche in its list of assets for for sale, but there is nothing being identified by Whitehall departments that comes anywhere near the Treasury's hopes for sales, which the Tories estimated to be worth around pounds 2bn a year.

The biggest remaining items for privatisation identified by the Tories before the election - the sale of the air traffic control and the London Underground - have been put on hold by John Prescott. It is likely he will follow a forthcoming select committee report by seeking commercial freedom for air traffic control to borrow in the commercial market, but is highly unlikely to privatise the service, and he has given a commitment to make sure the Tube remains "publicly accountable and publicly controlled", by bringing in pounds 7bn in private investment to upgrade the system. Mr Prescott favours "sweating" assets to produce more investment, rather than a sell- off.

The Chancellor, Gordon Brown, ordered Cabinet ministers to draw up a "doomsday book" of national assets, but that has failed to produce the expected sales which conservative estimates put at pounds 5bn, in spite of the inducement of allowing departments to keep the money if they sales were realised within two years.

Commons written replies to the Liberal Democrat MPs Malcolm Bruce and Norman Baker show a widespread reluctance of ministers to identify assets for sale, or to quantify the money they expect to raise from privatisation.

The Social Security Minister, Frank Field, said: "The amount of commercial rent that is payable on the property that is also vacant for the period 1997-98 is approximately pounds 1.01m."

His department had identified three benefits offices in Manchester, Todmorden and Eccles for sale but "information about the estimated value of surplus properties and land is commercially confidential".

The Lord Chancellor's office said it had identified a number of court buildings and the former Home Office creche. It said it was not possible to put a price on the sales. Margaret Beckett, the President of the Board of Trade, said a number of properties from her department had been sold, and one more was expected to be sold shortly, but she refused to say how much they would raise. The DTI meanwhile is spending pounds 786,000 a year on empty property and lists the value of its empty property at pounds 3.4m, while public bodies have empty property worth pounds 26m.

The Ministry of Defence, which owns vast tracts of land, insisted on secrecy over the value of its asset sales, although it said it had identified 235 properties and land for disposal.

John Prescott's Department of the Environment, Transport and the Regions has identified driving test centres for sale, and a coastguard property at 1 Gordon Road, Lowestoft, with other items, which are expected to raise pounds 2.6m. But it is well short of the hoped-for windfall.