No general guidelines have been issued to local authorities in relation to the sale of local authority land. However, local authorities have general and discretionary powers under s.123 of the Local Government Act 1972 to dispose of land in any manner they wish. The Secretary of State's only statutory function is to give or refuse consent to a proposed disposal where the authority will receive less than the best consideration that can reasonably be obtained which is usually the open market value of the site.
The General Disposal Consent issued in August 2003 in ODPM Circular 06/2003 gave local authorities a very wide discretion in relation to their land disposals and enables them to make disposals which will contribute to the promotion or improvement of the economic, social or environmental well-being of an area at less than best consideration provided the undervalue does not exceed £2 million. The circular provides advice on making an application for a disposal that falls outside the terms of the general consent and it also makes it clear that, when disposing of land an undervalue, authorities should remain aware of the need to fulfil their fiduciary duty in a way that is accountable to local people.
If the land is held planning purposes it can be disposed of by means of a specific consent under s.233 of the Town and Country Planning Act 1990. Disposal consents have also been issued in relation to housing land under the Housing Act 1985.