Letter: The role of Urban Development Corporations

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The Independent Online
Sir: Your article on Urban Development Corporations ('Development losses of pounds 67m 'a scandal' ', 13 July) contains two gross inaccuracies. Urban Development Corporations represent an excellent way of assembling, clearing and ensuring the use of large tracts of derelict and vacant land that disfigure the centres of our great conurbations. They offer the opportunity for low-cost housing for sale, commercial and industrial development, and improved shopping and leisure facilities at the core of our cities. You have no basis whatsoever for alleging that I dislike or am hostile to them. On the contrary, I have often spoken and written about their virtues.

Your numbers about the alleged losses on land holdings are equally fallacious. The Labour Party has misunderstood answers to questions it has posed. It is not possible to compare the acquisition cost of all land bought by the UDCs with the current value in the books. Land is held in the UDCs' accounts on the normal prudent basis required to produce a true and fair view; that is to say, at the lower of cost and net realisable value.

On this basis, it would be impossible for the UDCs ever to show gains before disposal on their land-holdings. Yet history shows that many of them have made substantial gains on holdings when they have come to sell them at market prices. In addition, land acquired includes land acquired for public purposes and for the construction of roads and other necessary access facilities. Such land may well be valued at zero, but it is essential to create the conditions for enterprise and investment in an area.

Finally, even on the basis of the figures that you and the Labour Party are misusing, the figures for all 10 English UDCs, combining realised gains to date and book values, show an overall gain of pounds 173m rather than a loss of pounds 67m.

Yours sincerely,

JOHN REDWOOD

Minister for Local Government and Inner Cities

Department of the Environment

London, SW1

15 July

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