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

Suffolk districts call for minister to intervene over county's reorganisation tactics

By Paul Marinko | 13 November 2025

Suffolk’s districts have urged ministers to take action against the county council for its tactics aimed at landing a single countywide unitary through reorg...

ASSET MANAGEMENT

EXCLUSIVE: Cuts expected after LGA overhaul

By Dan Peters | 13 November 2025

Organisation agrees to new future operating model as chief executive promises ‘step change in how we lead, influence and deliver’.

ASSET MANAGEMENT

Building local government's next generation of finance chiefs

By Ann McGauran | 12 November 2025

The Society of County Treasurers is launching a programme to help finance professionals leap ahead to become excellent organisational leaders. Ann McGauran r...

ASSET MANAGEMENT

Taking the risk out of digital

By Emma Foy | 12 November 2025

True transformation depends on partnership, trust, and shared accountability, and when suppliers take responsibility for outcomes councils can focus on deliv...

Popular articles by Rob Whiteman CBE