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

Marvin the Paranoid Android's secret council reorganisation diary

By Blair McPherson | 30 March 2026

Brought in to advise a council with reorganisation, Marvin the Paranoid Android’s suggestions don’t go down well. He concludes the real challenge facing this...

ASSET MANAGEMENT

LGR: The importance of a clear narrative

By Amardeep Gill | 30 March 2026

On reorganisation, the Government has shown a willingness to accept variation. But that flexibility comes with an expectation that local areas will present w...

ASSET MANAGEMENT

Fiscal devolution must be rolled out to as many regions as possible, as quickly as possible

By Shevaun Haviland | 30 March 2026

Allowing regions to retain a share of tax revenues aligns incentives in a way businesses instinctively understand, says Shevaun Haviland.

ASSET MANAGEMENT

Why more areas should become Boroughs of Sport

By Cllr Ross Garrod | 27 March 2026

Merton is on a mission to become London’s first Borough of Sport, says Ross Garrod. He sets out five simple steps it used to adopt a whole council approach t...

Popular articles by Rob Whiteman CBE