£8m sale of public assets has gone on redundacies

More than £8 million has been spent across the West of England making council staff redundant since new powers were introduced - funded by selling off dozens of public spaces.

With local government funding slashed since 2010, councils across the country have cashed in on new freedom over how they spend income from sales. Figures obtained by the Bureau of Investigative Journalism show spikes in the number of staff laid off after the policy was introduced in 2016/17. The so-called “flexible use of capital receipts” has been put to use by Bath and North East Somerset Council. A freedom of information request shows that in 2017/18 it spent £3.8 million making 16 people redundant, and more than 80 per cent of that sum, £3.1 million, was funded by selling off assets. In the 2016/17 financial year, Bristol City Council spent £5.3 million on exit packages for 401 people - 10 times the number who left the authority in 2015/16. It budgeted to use a further £5.1 million in 2017/18 but “that was not called upon”. Before the new flexibility was introduced in April 2016 by then chancellor George Osborne, local authorities had to put the money raised from selling assets towards other similar types of expenditure. The proceeds could not be used to support day-to-day running costs. According to the Local Government Association, councils will have lost almost 60 pence out of every pound the Government had provided for services. A spokesperson for the Local Government Information Unit said councils were in danger of having to “sell off the family silver to stay afloat”. An FOI request showed B&NES Council sold off 19 public spaces into private hands between 2015 and 2018, although it did not reveal how much it had received or who bought them. The assets included land, offices, homes and public toilets. The Government said local authorities using the policy must “demonstrate the highest standards of accountability and transparency”. This means producing annual reports detailing the amount of money being spent, the projects funded and the savings targets set, but they do not have to include details of which assets were sold. B&NES Council papers said it was “highly dependent on the use of flexible capital receipts to achieve its budget aims”. The redundancies in 2017/18 funded by the policy were expected to “release ongoing revenue” savings of £1.7 million in 2018/19, rising to £2.4 million in 2019/20. The authority’s budget papers for this year said: “Putting forward a balanced budget for 2018/19 is highly dependent on the flexible use of capital receipts to fund redundancies and one-off costs such as transformation to deliver the savings required. “If sufficient receipts are not achieved, the council will have to fund redundancy costs from other reserves, bringing them below required levels.” B&NES Council figures revealed that it plans to flexibly use £1.1 million of capital receipts in 2018/19, £8.4 million in 2019/20 and £4 million in 2020/21. It is not clear how much of the £13.5 million total would be used on redundancies but the authority is in the process of laying off 300 staff over two years. Two thirds of them were scheduled to leave during 2018/19. Labour councillor Joe Rayment said: “There are absolutely no winners from this policy and it is only being done because of the extent to which local government budgets have been cut by this Conservative government and the Conservative/ Liberal Democrat coalition government before that. “But a short-term fix like this, with long-term consequences, is not the right way to balance the council’s books. Once these assets are gone, they’re gone forever.” FOI requests found that 64 councils in England have spent a total of £381 million made from property sales using the new flexibility since the policy came into effect. Almost a third of that, £115 million, was spent on making people redundant. Richard Watts, who chairs the Local Government Association’s resources board, said: “Between 2010 and 2020, councils will have lost almost 60 pence out of every pound the Government had provided for services. “With staffing being one of the biggest costs for councils, this has led to the number of people directly employed by local government falling by almost a third in 10 years. “Having been given the flexibility, it has made sense for some councils to use capital receipts while they can to manage this substantial transformational change. “This has allowed them to avoid running down the reserves which helps them try and manage the growing financial risks to local services.”