Forest sales under fire

THE Forestry Commission is criticised today for the way it sold off 66,000 hectares of property - a year after the new Government bolted the gate on further large-scale sales.

A report from the National Audit Office said that the commission had "not completely" established sound strategies for selecting forests for disposal, or assessed the costs and benefits of disposal decisions.

It also criticised the commission's decision to delegate privatisation decisions to local offices, saying it risked missing "opportunities to maximise efficiency savings arising from rationalisation of the forest estate at a national level".

But it was not clear from the report whether Sir John Bourn, the Comptroller and Auditor General, felt the blame lay with the commission or Malcolm Rifkind, the former Secretary of State for Scotland who ordered a 100,000-hectare privatisation in 1989 in the hope of raising pounds 150m by the end of the century.

Sales were suspended on 19 March 1997, with the calling of the last general election, by which time the commission had sold off 65,674 hectares and raised pounds 75m of the pounds 150m target.

Since the election, the commission planned to raise pounds 20m from the completion of sales that were in the pipeline when the election was called, but the new Government has since imposed a moratorium on further large-scale forest sales, in line with its manifesto commitment.

This year, the commission hopes to raise another pounds 25m from a sale of surplus assets, mostly "from the previously agreed surrender of leasehold interest in a relatively small piece of land approved for housing development, with the balance from sale of buildings, bare land and small isolated blocks of forest which contribute little to the commission's objectives".

That leaves the commission with a 1.1m-hectare estate, worth pounds 1.56bn, of which 850,000 hectares are planted with trees. But as further large- scale sales from that estate are now blocked by the Government, today's report will have no bearing on any future Government action.

However, the report does suggest Tory ministers gave the commission conflicting instructions, which meant that there was a difficulty over maintaining public access to some of the forest land that was sold off.

The commission took legal advice in April 1989, before Mr Rifkind issued his final privatisation order, suggesting that it could grant leases on land, with enforceable conditions requiring tenants to allow public access.

But Sir John's auditors were told by the commission that they had no alternative but to make freehold sales. "They told us that they needed to sell the freehold in order to comply with ministerial directions.

"They also considered that the costs associated with retaining management responsibility for leased land, undertaking complex conveyancing of leases and enforcing lease conditions, would not lead to the efficiency benefits expected from rationalisation being achieved."