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

Putting the sector in the Budget driving seat: Ditch the SEND statutory override

By Rob Powell | 04 November 2025

Rob Powell tackles his seven priorities for the Budget and says it’s all to play for.

ASSET MANAGEMENT

Lessons from private and public sector leadership crossover

By Jes Ladva | 04 November 2025

Ensuring a leadership flow between the private and public sectors is one way to maximise the value of talent. Odgers recently held a round table with The MJ ...

ASSET MANAGEMENT

Putting local government in the Budget driving seat: Leaning on the dream

By Mike Emmerich | 04 November 2025

Asked for his fantasy Budget, Mike Emmerich suggests we should ‘plan for the national big stuff’ and let local leaders innovate to fix the ‘knotty issues’.

ASSET MANAGEMENT

Local government reorganisation: Better late than never

By Michael Burton | 04 November 2025

While LGR is already proving a challenge, for many Labour ministers it also represents unfinished business from five decades ago, says Michael Burton.

Popular articles by Rob Whiteman CBE