A journalistic collaboration has today exposed how councils sell off assets and then use the money to fund redundancies.
The Bureau of Investigative Journalism, working with the HuffPost, led the investigation and found that this issue began when a change to government policy in 2016 allowed local authorities more freedom over how they could spend the money generated through asset selling.
Previously, UK councils had to use this money to fund the cost of buying new public assets such as schools and community centres. The change allowed them to use the proceeds on cost-cutting measures, which included investing in new technology to reduce spending in the long-term.
Over the past four years, councils nationwide have raised a total of £9.1 billion from selling properties while Sheffield and Rotherham Councils have made a combined total of £39,929,911 from the sale of 357 spaces since 2014.
The report found the average number redundancies was 75% higher at councils that used the new spending powers than at those that didn’t over the past three years.
Of the £381 million made from property sales from 64 councils, almost a third was spent on making people redundant.
Labour Deputy Leader, Tom Watson said: “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.”
Sheffield City Council
Graves Park in south Sheffield is one area that has been hit by this new policy by councils. Local community group Friends of Graves Park were distraught after the 17th Century Cobnar Cottage was sold by Sheffield City Council in January 2016.
The group even took them to High Court before losing the case and being told to pay £40,000 worth of legal fees.
Caroline Dewar, Chair of Friends of Graves Park, said: “As it stands, Sheffield City Council can make a case for selling off as much of Graves Park as they want, provided they spend those funds on the rest of the park.
“Governments and councils come and go, there are lean years sometimes, but once this beautiful and rare gift is gone, it is gone forever.”
This sentiment has been echoed all over the country. Mark Holt, 51, a boxing coach from Birmingham said he has had to move his boxing gym out of its previous home because the council was selling the building.
He is only able to stay in his current building temporarily because the council is also planning to sell this building.
He said: “The council is closing so many youth centres and they wonder why there are kids out on the streets stabbing each other.
“We’ve been told we’ve got to leave again so we’re in the process of trying to get our own unit.
“It’s destroyed my uncle. He doesn’t sleep. We don’t just run a boxing club, we go to shows all around the country with our lads. We keep kids off the streets.”
Bristol City Council also proves the trend of increased council redundancies since 2016. The previous year, in 2015, only 39 people were made redundant. After the change in policy, this number increased ten-fold.
The Public Accounts Committee (PAC) accused the government of being in a state of denial in terms of expecting local authorities to be entirely self-funded by next year.
A spokesperson for the Local Government Information Unit Thinktank said: “Councils are in a precarious financial position after years of budget cuts and uncertainty about how they will be funded post-2020.
“We are in danger of forcing councils to sell off the family silver to stay afloat.”