A council fire-sale will be a disaster for our communities.
With one in five English councils likely to declare bankruptcy in 2024 and 90% drawing from their reserves, the need to sell off assets to meet expenditure seems unavoidable.
Over 75,000 public assets, worth £15bn, have already been sold since 2010 to free up cash. Communities have lost so much already; playing fields, community centres, libraries, youth clubs, swimming pools, toilets.
The Government may relax council spending rules further, because “the ability to use capital resources and borrowing for revenue costs is a powerful additional flexibility.”
With so many councils at risk, this is a convenient way for the Treasury to fund revenue expenditure without threatening higher public spending. But this is not a solution. As many across the local government community have shared, releasing assets is not a sustainable approach to meeting annual budgets.
This is a crisis of the government grant, a necessity for cash-strapped, squeezed local government. As Dan Hancox wrote in 2019;
“It is hard not to see the great public sell-off as a tragic unravelling of the public good, a rapid dismantling of a public realm forged over a century and a half at local level, and a desecration of the legacy of the Victorian and Edwardian idealists.”l
This becomes a question of what local government should be. For every pound lost to cost pressures, the focus on a narrow range of statutory services becomes necessary.
The Levelling Up agenda was correct to recognise that the UK needs to restore its public realm and revive pride of place. But we can’t do this without the assets that communities are built upon.
Council ownership is not the only way to do this. But right now, it’s the best way. Community ownership is not properly supported or resourced by central or local government. For the period that 75,000 properties were sold off by local authorities, only 2,500 assets were brought into community ownership.
We cannot risk a fire-sale that offloads assets to those with no stake in our vulnerable public spaces. The CFPI opposes the proposed changes to local authority spending rules to encourage the selling of council assets, and urges the Government to provide sustainable central grant funding.