"The NHS will last as long as there are folk left with the faith to fight for it"
Aneurin Bevan

Saturday, 5 February 2011

The sale of our woods

Caroline Spelman has handled the policy of selling off the Forestry Commission land very badly and now her colleagues (including David Cameron) are trying to row back, unsuccessfully. Her department produced a consultation document and accompanying this is one titled "Selection Criteria: For the sale of Forestry Commission land in 2011" I think that is unequivocal don't you?

This sale document says:
On 2 December 2010, Ministers announced that approximately 40,000 hectares of land currently managed by Forestry Commission England would be sold over the four year period 2011/12 to 2014/15.
The consultation document says that the Forestry Commission owns 258,000 hectares, so the sale document is for about 16% of their land. It is important to point out that this document says that the government has already agreed that they would sell this 40,000 ha, there is no consultation on this 16% of the Forestry Commission estate. The sale document says that preference will be given to voluntary or community groups. There is ample evidence that at the moment woodland is valued at least at the price of bare agricultural land (currently ~£5,200 per acre or £12,800 per ha), however some woodland in 2010 sold for up to £15,000 per acre. 40,000 ha is about 100,000 acres, if we assume woodland fetches about £5,000 an acre this means that voluntary groups will have to find about £500m. (We have to assume market rates because the sale criteria document says "This will be an open market valuation carried out by the FC’s selling agents".) There will either have to be a lot of very rich volunteers, or maybe the government is expecting to go for their second preference: commercial timber companies.

Half a billion pounds is a lot of money, even spread over four years, however, note that the sale document says that the land will be sold at market value, so this £500m assumes that land will retain its value. Basic economics says that if you flood the market the price will plummet. According to chartered surveyors SmithsGore every year around 100,000 ha of agricultural land is sold. Woodland would make a tiny proportion of that figure, so (an average annual figure of) 25,000 ha of extra woodland on the market would depress the market considerably. But I must stress again, this is only for the 40,000 ha that the government has already agreed to sell.

The consultation on the remaining 84% (218,000 ha):
the Government is proposing a mixed-model approach with the following elements:
  • Inviting new or existing charitable organisations, to take on ownership or management of the heritage forests to secure their public benefits for the long-term future;
  • Creating opportunities for community and civil society groups to buy or lease forests that they wish to own or manage;
  • Finding commercial operators to take on long-term leases for the large-scale commercially valuable forests. By leasing rather than selling, it will be possible to make sure that these forests continue to deliver public benefits through lease conditions.
In addition, the Forestry Commission is increasing its estate rationalisation through open market sales (and lease reversion).
(That term "lease reversion" is interesting, isn't it?)

The preference is for voluntary or community groups to buy the land. Let's do some calculations with those figures. This is for the remaining 218,000 ha (540,000 acres). Again, assuming a commercial value of £5,000 per acre, this would bring in a cool £6.75bn. I never thought that charities and "community groups" were so rich!

However, if the government is likely to sell (on average) 64,000 ha of woodland per year in a market that is usually a few hundreds per year, the value of woodland will plummet, and potentially it would be next to worthless. This may be good news for community and voluntary groups to whom the woodland would be sold at "market value", but it is also good news for the commercial companies who hope to get their hands on 150 year leases on the commercial plantations.

Whatever way you look at this, the policy seems totally ill-thought out and designed to fail. It is no wonder Cameron is making noises about stopping this silly sale.


  1. Thanks Richard, really useful

    (Also, liked your part at Netroots - shame the other panellist went double over his allotted time, and the chair didn't do anything. Would have liked to ask some questions on your work)


  2. Your figures are absolutely WAY off!

    I bought a forest and a woodland off the FC last year. The forest was £380 per acre and the woodland was £1235 per acre. In turn, these prices are double what they were five years ago.

    In the case of the forest, it was a plantation of lodgepole pine (a foreign species supporting practically no habitat diversity). The FC had planted it on now internationally protected peat flows and sold it off because their "management" extended to growing it for 60 years and then watching it blow over.

    Similarly, the woodland has had zero management.

    Contrary to your assumptions, the FC sales were causing the woodland prices to INCREASE as it became clear we may get some management back into our woods.

    Where are the woodland crafts? What happened to coppicing, bodging, charcoal production? Do you seriously think the FC has managed our woods environmentally responsibly?

    And as for access.....Why can't I camp in the New Forest except in grossly overpriced FC sites. It used to be common land and they rightly changed the law to restrict camping to local areas. As per normal, it's only over time that our rights turn into having to pay LARGE fees with associated restrictions (no tree swings, dens, etc).

    As for the forest and wood, now in private hands, they're fully open to the public and the local kids toboggan, ride, camp, build dens, rope swings, etc. The local adults park in the FREE car park (unlike FC pay and display car parks in the Forest of Dean) which remains open 24/7 without petty restrictions.

    The only difference between you and me is that I consider government to be incompetent, bureaucratic, authoritarian and killers of freedom. You may also note that they've killed the UK timber market and instead allowed us to be swamped by the products of wholesale destruction of ancient rainforests.

    Well, it's all coming to an end and we can't afford to keep behaving like this. You're right, forests and woodlands have a value far greater than economics so why is it OK to import 88% of our timber whilst destroying the UK timber market and destroying the worlds rainforests?

    If we sold off every house in the UK we'd still have a multi-trillion debt! That's how broke we are.

    Government should exist to facilitate the freedom of its citizens - not nanny control every aspect of our lives. Maybe you think we should nationalise our farms so that you have access to the countryside - or maybe you should look at the history of Russia!

  3. I disagree with you and the latter part of your comment explains why. You appear to think that everything should be privately owned and somehow also accessible to the public. Quite an unbelievable aspiration, if you ask me. (Or do you think that you should have access to the bathroom in the house I am paying a monthly mortgage for?)

    Your description of your woodland explains why it was so cheap. It is hardly typical. Try looking at the prices at woodland on places like http://www.woodlands.co.uk/

    Just off their front page today:

    Lincolnshire 4 acres £35k
    Wales 10 acres £49k
    Wales 6.5 acres £39k
    Aberdeenshire 13.5 acres £65k

    Not quite £1235 an acre, is it? Even woodland in fairly inaccessible areas of the country is selling for £5k or so per acre.

    These are actual prices of woodlands for sale (and as they say on BBC programmes, other land agents are also available, and show similar prices).

    As to whether prices are going up or down, I would suggest that you read the analysis of SmithGore (who, incidentally are the source of many of the figures I quote).

    Enjoy your woodland, and remember, it is exempt from inheritance tax!