"Communities across the UK are paying for spiralling levels of council borrowing with a fire sale of publicly owned facilities, a BBC study has found. Schools, care homes, a boxing gym and even an Olympic legacy equestrian centre are among hundreds of buildings being sold as struggling councils seek to reduce a debt pile totalling 122bn. Chief executive of the Local Government Information Unit (LGIU), Dr Jonathan Carr-West, said "public value" would continue to be eroded until the government"
"Since 2010, they have bought shopping centres, office parks and solar farms as well as funding large housing developments with borrowed funds. Most of that was done through an arm of the Treasury known as the Public Works Loans Board (PWLB) and until 2022 interest rates on that borrowing remained relatively low. Last year, the Public Accounts Committee warned debt levels had become "unsustainable" despite curbs placed on borrowing for purely commercial aims in 2021."
"Their combined 122bn of debt is now equivalent to 1,700 per UK resident. Usually, authorities are not allowed to sell off assets in order to fund day-to-day services such as bin collections or social care. But increasing numbers of councils in financial trouble are now being given powers to do so by the government. Known as "capitalisation directions" they also allow councils to take out short-term loans to pay for day-to-da"
Communities across the UK are selling publicly owned facilities to address spiralling council borrowing, including schools, care homes, a boxing gym and an Olympic legacy equestrian centre. Councils have accumulated £122bn of combined debt, equivalent to about £1,700 per UK resident, and that total rose by 7% last year. Since 2010 councils used borrowed funds to buy shopping centres, office parks, solar farms and to fund large housing developments, mostly via the Public Works Loans Board while interest rates remained relatively low until 2022. The Public Accounts Committee warned debt levels became unsustainable despite 2021 curbs on commercial borrowing. Increasing numbers of councils in financial trouble are being allowed to sell assets and take short-term loans under government "capitalisation directions". Public value faces erosion without a long-term funding solution, and the government acknowledges the funding system is broken and plans reforms.
Read at www.bbc.com
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