New Report Details How Local UK Governments Have Sold Off Public Assets – Next City

New Report Details How Local UK Governments Have Sold Off Public Assets

Birmingham's Council House; according to a recent investigation, the city council here was found to have taken the most extensive advantage of rules enabling cities to sell off public buildings to address budget shortfalls. (Photo by Elliott Brown via Flickr)

Local governments in the UK have sold off 12,000 public buildings over the past few years, an investigation by The Huffington Post UK and the nonprofit Bureau of Investigative Journalism has found.

Eight years of the UK austerity program, which included deep cuts to local government funding and an increase in VAT, has left municipalities scrambling to make up deficits, HuffPo UK reported. Funding from central government declined by 60 percent since 2010.

Then, in 2016, the UK’s finance minister (known as the Chancellor), George Osborne, proposed a change in how cities could use money earned from selling public assets. Previously, local authorities could only use the money from selling publicly owned assets to buy new ones. In April 2016, Osborne’s new rules meant that authorities could instead spend the money on anything that would be a permanent cost-cutting measure, like buying new technology, merging administrative staff offices, or other reforms that reduced spending.

This change had the perverse effect, the HuffPost says, of allowing cities to sell off, for example, a local library, and then use the proceeds to pay severance for the employees that were losing their jobs.

“Our councils — now financially bare-boned — are having to make extremely difficult decisions to stay afloat, and that has meant a shrinking of public space and the loss of public jobs and services,” wrote Gareth Davies and Emma Youle, correspondents at the Bureau of Investigative Journalism and HuffPost UK, wrote in an editorial accompanying the investigation.

The nonprofit Locality has been raising the alarm about the issue, as well, launching a campaign called The Great British Sell Off last year. That report argued for community ownership of such spaces, suggesting that the government create a £200-million fund to help transfer public assets into community control. (Locality, it should be noted, is a “national membership network supporting community organizations,” so community control is kind of their thing.)

Locality chief executive Tony Armstrong told The Guardian that “every one of us can think of a local public building or outside space we love and use, from libraries to lidos and town halls to youth centres. They are owned by the public and they’re being sold off for short-term gain to fill holes in council budgets.”

The Locality investigation used Freedom of Information requests to get responses from 55 of 353 local authorities in England, and extrapolated the results to obtain national totals. The new Bureau of Investigative Journalism investigation did not get a 100% response rate either, but got data on more than 12,000 spaces sold between April 2014 and July 2018.

Birmingham made the most extensive use of the new flexible spending powers, the investigation found. The city spent £49 million raised from selling 167 buildings or plots of land from April 2016 to July 2018. Almost half (£23 million) was spent on layoffs, the research found. The city wouldn’t reveal the buyers or the prices, but HuffPost noted that some of the sold assets included community centers, an outdoor education center and even a university building.

Mark Holt, a boxing coach who runs the Nechells Amateur Boxing Club, a nonprofit that works with adults and local youth in Birmingham’s inner city, decried the sell-offs to the HuffPost in another article.

“The council is closing so many youth centres and they wonder why there are kids out on the streets stabbing each other,” he said. For 60 years, Nechells was based in a community center that was sold by the government in 2016. It moved to another community center in August 2017, but that center, too, is being sold by the city.

Members of the country’s Conservative party have found the sell-offs concerning as well. “The council has to be very careful about how it uses its assets because once you’ve lost them, they’re gone,” Robert Alden, leader of Birmingham City Council’s Conservative party, told HuffPost UK. “With many of the assets the council is selling they’re getting a short-term benefit but not looking at the long-term revenue impact.”

Rachel Kaufman is a journalist covering transportation, sustainability, science and tech. Her writing has appeared in Inc., National Geographic News, Scientific American and more.

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Tags: public spacebudgetscity councilsdevelopment