Local Government Finance
The question
To ask the Secretary of State for Housing, Communities and Local Government, with reference to the statutory guidance entitled Guidance on the flexible use of capital receipts, updated on 26 March 2025, whether the sale of a local authority school playing field would qualify as a capital receipt.
Answered by Jim McMahon
Under the general direction on “Flexible Use of Capital Receipts” (FUCR), authorities may use the proceeds from qualifying asset sales (capital receipts) to fund the revenue costs of projects designed to generate ongoing savings or reduce the costs of service delivery. This is to help councils deliver transformation and invest-to-save projects they might not otherwise be able to afford from their budgets.
When applying the direction, the Authorities are required to have regard to the Guidance on Flexible Use of Capital Receipts issued by the Secretary of State under section 15(1)(a) of the Act. This sets out best practice in using the flexibility.
For the purposes of this direction, authorities may use the proceeds from any qualifying asset disposal made while the direction is in force, provided the use is not otherwise restricted. For example, receipts from the sale of Right to Buy assets are excluded. Disposals must also be genuine: the flexibility does not apply to sales made to companies owned or controlled by the authority or in which it has a financial interest.
It is for local authorities to determine how best to use this flexibility, including decisions on which assets to sell. However, the Government expects all decisions to demonstrate value for money and to be in the best interests of local residents.
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