Title

ASSET MANAGEMENT

Selling the family silver is a mistake

The Government is Incentivising councils to sell off publicly-owned assets, 'but these flexibilities should not become business as usual and they are not a sufficient substitute for a reform of our broken funding system', warns Rob Whiteman.

Grounded in a reluctance to provide direct funding, the Government is incentivising councils to dispose of publicly-owned buildings and assets.

But selling the family silver to fund ongoing revenue costs is a terrible way to fix financial distress.

While we welcome greater flexibility handed to councils, the directive to break the rules of accounting convention marks an appalling shift from stable funding.

At best, disposing of assets to fund revenue shortfalls defers the impact of cost pressures on the general fund. In some cases these flexibilities risk exacerbating costs regardless.

This is unsustainable because it generates one-off cash injections that come with the burden of liability and borrowing costs, not to mention the loss of a potentially productive asset for the local authority.

In this way, there is a risk local authorities are drawn into fire sales in efforts to plug budget shortfalls. This could drive poor value for money for communities.

The Chartered Institute of Public Finance and Accountancy (CIPFA) recommends flexibilities are limited to invest-to-save and uptake closely monitored. Independent reviews handled by a stakeholder panel including CIPFA and the Local Government Association could be an option.

Raising money in this way does not address longer-term pressures on finances and fails to target the underlying issue of how services are funded. The funding gap of £4bn, estimated over the next two years, can hardly be topped up by flexibilities on capital funding alone.

These flexibilities should not become business as usual and they are not a sufficient substitute for a reform of our broken funding system. The Government must set out what longer-term support will be provided. Only through such strategic and lasting measures can we safeguard the stability of our local government financing.

Rob Whiteman CBE is chief executive of CIPFA

X – @RobWhiteman

ASSET MANAGEMENT

How Brent LBC is future-proofing services

By Shafiq Kazi | 02 March 2026

What started as a technical improvement to transform payment processes at Brent LBC quickly became a cultural one, providing tools that fit the way staff wor...

ASSET MANAGEMENT

Expectations for AI in local government are now more realistic

By Emma Ockelford | 02 March 2026

Polling shows public confidence in AI remains strong, but as Emma Ockelford notes, there is now a clearer understanding of what it takes to deliver AI at sca...

ASSET MANAGEMENT

The Future of local government technology: AI, robotics, and agile platforms

By Vicky Armstrong | 02 March 2026

Vicky Armstrong says low-code platforms allow councils to dramatically reduce risk, shorten time to value, and create a foundation on which AI, automation an...

ASSET MANAGEMENT

Scottish IJBs at 'critical point', commission finds

By Lee Peart | 26 February 2026

Integration Joint Boards (IJBs) have reached a critical point in Scotland, with a significant risk they will become financially unsustainable within the next...

Popular articles by Rob Whiteman CBE