Communities in the UK are experiencing the impact of rising council debts, as a recent BBC study reveals increasing sales of publicly owned properties by local governments. The combined debt of councils has reached £122 billion, prompting many to sell assets such as schools, care homes, gyms, and community centres to manage financial strains. Councils are now under pressure to alleviate their debt, with some selling public facilities to cover operational costs.
According to Dr. Jonathan Carr-West, the chief executive of the Local Government Information Unit, the ongoing erosion of public value will persist without a comprehensive solution from the government. The government has acknowledged the issues within the current funding structure and is pursuing reforms. Councils have the capacity to borrow funds for various improvements, yet many have also engaged in investments to generate income, leading to substantial borrowing.
Last year, a warning from the Public Accounts Committee stated that local authorities’ debt levels were “unsustainable,” despite restrictions on certain borrows in place since 2021. The BBC Shared Data Unit observed a 7% increase in overall council debt over the past year, equating to approximately £1,700 for each UK resident. Generally, councils are prohibited from selling assets to pay for everyday expenses, but the government has started granting powers for such actions, allowing short-term loans that contribute further to debts.
In this climate, Croydon Council has engaged in extensive asset sales while accumulating debts—currently standing at £1.5 billion. Their recent disposals of community facilities highlight the challenges councils face in addressing debts while providing essential services. Similar stories are noted in Greenwich, where the closure and sale of the Greenwich Equestrian Centre have raised concerns about the long-term effects on community resources.
Debate continues on the sustainability of council borrowing practices and the urgent need for governmental reforms to mitigate the impact of rising local debts on public services.
Source: https://www.bbc.com/news/articles/cq87497v8ypo?at_medium=RSS&at_campaign=rss