Ryan Swift, research fellow at IPPR North, urges the next Government to stop the mass sell off of council assets.
Across the country, local authorities, cashed-strapped after more than a decade of austerity and cuts to local government funding, are having to sell off prized local assets in attempts to try and balance their books and continue to deliver the services needed by their residents.
IPPR North research shows that locally controlled spending power has drastically fallen in England since 2009/10 – especially in urban areas. Taking all locally controlled spending power together, the average local government district area has seen a fall of £1,307 per head of population in real terms. Since 2021, six local authorities have issued section 114 notices, which means effective bankruptcy. Many other councils are in fear of having to go down the same route.
This dire financial context means that under-pressure councils are often left with little choice but to sell assets that belong to the public – land such as car parks, buildings including libraries and museums, and other local ‘crown jewels’ such as artwork and historic artefacts – to try and make ends meet.
Last year, our research based on analysis of published local government data alongside statistics from a Freedom of Information request showed that an estimated 75,000 council assets, worth around £15bn, have been sold by local authorities in England since 2010. That’s an average of more than 6,000 council assets worth around £1.2bn being sold every year during the last 14 years.
In recent months, the trend of councils being forced to sell off their assets has continued apace. The Government recently changed the rules to allow some particularly hard-up councils to sell assets in order to fund frontline, statutory services. This mass sell-off represents an irreversible loss to our public realm. The situation that local government finds itself in is a far cry from the promise of levelling up that people voted for in 2019 and it has a real impact on people and places all across the country.
We have carried out deliberative research in communities across England which found that people feel a profound sense of loss. People speak of their area’s former greatness and of its proud history but lament what they see as contemporary decline, decay, and abandonment. The continued forced erosion of our social fabric and the loss of civic goods in towns and cities across the country will worsen these sentiments.
The task of fixing our broken local government finances and ending the mass sell-off of assets must be a top priority for any incoming Government. In the short-term additional funding to stabilise local government finances is needed. Priority should be given to areas with high need now, reflecting current spending pressures that means a £4bn cash injection in the next two years. The current precarity of local government finance and declining spending and investment must end.
But to go further in fixing our broken local government finances we recommend that a fair, needs-based, whole-place funding model is introduced. Such a model would be tied to an assessment of places’ needs and challenges, including demographics, deprivation, and delivery considerations for public services. It would ensure that all places receive sufficient funding to provide local public services, defined according to a universal service offer across places, and with clarity for authorities and the public on local competencies and duties.
Councils shouldn’t have to sell off the local crown jewels to simply deliver what their residents need and deserve. The unsustainable and damaging approach to local government funding that we have seen in recent years must end. Fairer, multi-year funding settlements would begin to reverse austerity’s damage and be the first step on the road to stronger local financial powers.
