Councils selling off assets to raise money is nothing new, but the current exceptional financial support model is allowing councils to keep their day-to-day spending afloat by borrowing or flogging assets on an unprecedented scale.
Our new report found that more than £1bn of public assets have been sold by councils receiving exceptional financial support (EFS) in the last five years, with targets to flog off another £1bn in 2025/26.
This is happening in the context of a wholesale reorganisation of local government, and a sector-wide financial crisis that has driven many local authorities to the brink of bankruptcy. A hollowing out of local government has resulted from decades of funding cuts, privatisation and centralisation of power away from local areas. The current asset sales programmes form part of the biggest privatisation that has ever happened in the country and they have the potential to change the face of local councils forever.
While some assets being sold off hold little value to local people, such as disused garages, industrial estates or empty land, there is evidence that valuable public assets are being sold off too. Amidst budget cuts to services such as libraries, social care and youth centres, these vital resources are being sold. In some cases, councils have come under fire for a lack of consultation with local residents about the value of the assets which are being ‘disposed of’.
This comes amid growing criticism of EFS in the local government sector, with a recent survey of finance officers finding that nearly half of them deemed it unhelpful or damaging for the long-term financial sustainability of local councils.
A record number of councils are expected to apply for EFS in the upcoming year, with announcements expected later this month. This is despite the government introducing multi-year settlements and a new formula to give funding boosts in deprived areas of the country.
Through data acquired from local councils, in-depth case studies and speaking to experts in the local government sector, this report explores the role of asset sales in attempts by councils to avoid having to declare effective bankruptcy. Our analysis questions the sustainability of that approach.
You can read or download the report here:
