The local government funding crisis has become so dire that councils are being forced to sell thousands of public spaces, such as libraries, community centres and playgrounds.
The Bureau of Investigative journalism writes:
In a double blow to communities, some local authorities are using the money raised from selling off buildings and land to pay for hundreds of redundancies, including in vital frontline services. In a major collaborative investigation with HuffPost UK and regional journalists across the country, the Bureau has compiled data on more than 12,000 public spaces disposed of by councils since 2014/15. Our investigation found that councils raised a total of £9.1 billion from selling property. The findings lay bare the spiralling impact of eight successive years of austerity, leaving services shut and buildings closed. Councils have been forced to take ever more desperate measures to stay in the black as their funding from central government has been cut by about 60% since 2010.
‘This is an absolutely ridiculous way to do business,’ said Khalid Mahmood, MP for Perry Barr in Birmingham, where the council has sold off land and buildings and spent the proceeds on making workers redundant. ‘We should never have been selling the land that we have inherited from our forefathers […] It just takes the future away from our children and grandchildren to come and that is really devastating.’
Our investigation also discovered a link between the sell-off of public assets and a sharp rise in redundancies at some councils, following a new government policy which gave local authorities more freedom over what they could do with their money. Previously, money made from selling public assets could only be used to fund the cost of buying new ones. In April 2016, the then Chancellor George Osborne relaxed the rules to allow local authorities to spend the proceeds on cost-cutting measures, such as sharing back-office functions with other authorities, investing in new technology or other reforms which have upfront costs but reduce spending in the long-term.
Freedom of Information requests submitted by the Bureau found 64 councils in England have spent a total of £381 million made from property sales using the new freedom since the policy came into effect. Almost a third of that – £115 million – was spent on making people redundant.
Our investigation revealed a clear trend – over the three years since the rules were relaxed, the average number of redundancies was 75% higher at councils that made use of the new spending powers than at those which did not. In Bristol, the number of council workers made redundant jumped ten times from 39 the year before the new rules were introduced to 401 the year after. The council paid for many of the redundancies by using proceeds from the sale of assets, which that year included a historic library.
‘If given the choice – would you consider selling a disused council building to raise funds to deliver a balanced budget – or would you retain that asset for potential future use but instead cut adult social care, or raise charges for care packages?’ asked the director of the County Councils Network Simon Edwards. ‘Put bluntly, these are some of difficult the decisions facing councils every day. Local politicians do not go into public service to slash and burn or make valued staff redundant, let alone sell assets to do this. But this is the financial reality of years of funding reductions and rising demand,’ he said.
Blame could not be laid at the door of local government decision makers, said Labour deputy leader Tom Watson. ‘Council budgets have been cut to the bone by almost a decade of Tory austerity,’ he said. ‘As a result, we’re seeing cash-strapped councils taking desperate measures to balance their books. Selling public buildings and spaces was a false economy that leaves our communities poorer… responsibility for these cuts lies firmly at this government’s feet. They should take urgent action.’