Of course, some councils (naming no names) positively relish selling off the family silver to fund such things as posh new HQ … and note the bit about “transforming services” … a phrase our council adores!
“On Friday, the government-appointed inspector sent in to examine Northamptonshire county council’s books after it went effectively bankrupt is due to publish his report on what went wrong.
While he may identify some failings that can be laid at the council’s door alone, in reality Northamptonshire merely had the dubious honour of last month becoming the first local authority since 1998 to be unable to balance its books. According to last week’s report by the government’s spending watchdog, the National Audit Office, there are around 15 councils that could follow suit in the next three years. The most likely contenders seem to be the Tory-run Surrey, Somerset, Lancashire and Norfolk county councils.
The NAO’s analysis highlights the financial predicament facing councils across England. Government funding has fallen by nearly 50% since 2010. Combined with increased demand for adult and children’s social care and homelessness services, as well as paying higher national insurance contributions for staff, implementing the “national living wage” and the apprenticeship levy, growing numbers of unitary and county councils are relying on their reserves to balance their budgets, the watchdog found.
If current rates of spending continue, the NAO calculates that 10% of social care authorities will have exhausted their reserves within the next three years, while more than 20% will have depleted them within four to five years. A recent survey by the Local Government Information Unit thinktank (LGIU) found that 80% of councils were concerned about their finances. Having already slashed spending on management, administration and non-statutory services, as well as raising council tax, local authorities are desperately trying to find sources of revenue. Most plan to increase or introduce charges for services such as parking, garden waste disposal, burials, planning, home care and meals on wheels. With no financial lifeline from the chancellor, Philip Hammond, in his spring statement on Tuesday, many are also having to sell off their assets to raise cash.
Although councils have long been able to sell school playing fields, swimming pools and leisure centres, they were previously barred from using money from building or land sales to fund frontline services. But since 2016, the government has allowed them to invest the proceeds of assets sold by April 2019 in “transforming” frontline services. This has given councils a greater incentive to flog assets. According to the NAO, in the year to April 2017, £118.5m of such capital receipts were used in this way.
Northamptonshire’s proposed sell-off of its new £53m HQ has been widely reported. But numerous other councils are hoping to sell their historic town halls, from Milford Haven in Pembrokeshire, to Southall in west London and Shotley Bridge in County Durham. Until last month Broxtowe borough council in Nottingham had also planned to sell Beeston town hall to developers, but in the face of fierce local opposition it is now inviting bids from those interested in making alternative use of the building.
“It’s a historic building which has been the civic centre for Beeston since 1936 and represents a lot for the people,” says Matt Turpin, a project and communications manager at Nottingham Unesco City of Literature and the co-founder of a blog about Beeston. “The locals are hugely against it. The council ran a consultation last year and 94% said they were against demolition.” A spokeswoman for the council says shortlisted proposals will be asked to submit business plans before a full council meeting makes a final decision.
With buoyant land values, it is hardly surprising that council-owned parks are vulnerable. Knowsley council in Merseyside is planning to sell 17 parks to developers for an estimated £40m. This will be used to create a charitable trust that will fund all future maintenance and upkeep of its remaining parks. The council will no longer fund parks and green spaces after 2019. After its 2018 budget was approved last week, the plans will now go before the scrutiny committee before a final decision later this year.
Knowsley is far from alone. More than half of cash-strapped councils in the north-west of England are considering selling their parks or finding other organisations to maintain them.
A 2018 parks survey being published on Thursday by the Association for Public Service Excellence (APSE) reveals that 85% of cash-strapped councils expect to cut parks and green spaces funding. Paul O’Brien, APSE’s chief executive, says this is a false economy. “While divesting parks may seem like a quick solution to financial pressures, in the long term we lose a valuable community asset that can generate a real return for local places and local people, he says.
“If we want to create healthy, active communities, develop attractive public realms to bring in new businesses and jobs, and safeguard the environment, then parks are the answer not the problem.”