Scale of local authority deficits revealed

A BBC study found that communities across the UK are paid for spilling levels of borrowed levels with fire sale of public -owned facilities, found in a BBC study.

Schools, Care Homes, a boxing gym and even an Olympic Legacy Ecuestrian Center are among hundreds of buildings, being sold as struggling councils, which tries to reduce the total debt stack of £ 122BN.

The Chief Executive of the Local Government Information Unit (LGIU), Dr. Jonathan Car-West stated that the “public value” would end until the government council came with a long-term solution for the loan.

The government said that it was known that the funding system for the councils was “broken” and was proceeding with reforms to resolve the problem.

Councils across Britain can borrow funds from banks or government to improve their areas – from construction of new schools to maintaining roads and providing shelter houses.

They can also borrow to invest to generate income.

Since 2010, he has bought shopping centers, office parks and solar farms and also funded the development of large housing with borrowed funds.

Most of them were done through one hand of the treasury, known as Public Works Loan Board (PWLB) and the interest rates at that loan remained relatively low by 2022.

Last year, the Public Accounts Committee warned that the loan level was “unstable” despite the borrowed curb in 2021 for purely commercial purposes.

But the BBC shared data unit found that those joint loans had increased by 7% last year. Their joint £ 122BN loan is now equal to £ 1,700 per UK resident.

Typically, authorities are not allowed to sell assets to fund day-to-day services such as bin collections or social care.

But the increasing number of councils in financial troubles is now being given by the government to do so.

Known as “capitalization directions”, they allow councils to take short-term loans to pay for day-to-day services-but in this process the loan piles millions in the pile.

This year, 30 councils were given those powers, last year it was 19.

The council sold £ 2.9bn public property in the last two years, sold through the right to purchase social homes other than social homes. People with the highest debt were double the highest vendors.

Dr. For Car-West, the system is unstable.

“As a local government finance officer told me,” this is essentially a loan for the local government, “he said.

“Now we are looking at the sale of property and once they have gone, they have gone. So the public values ​​that are now passing into private hands and will not return.”

The buildings owned by all councils are not used by the public in a direct manner, for example, holiday centers. Often officers have heritage buildings that are leased over time, such as shops, pubs and factory.

But Dr. Car-West stated that they still represents a public loss when they are sold when they are sold when they can be important when the councils come to the centers and cheap fare and long leases that local authorities can offer for helping local economies to encourage local economies.

In Croidon, South London, the council pledged money in a large housing company, a shopping center and a hotel among a host of other investments. When Kovid hit the epidemic, he lost millions and could not repay his debts.

In the last four years, the £ 210m of public property will only cover about 15% of its current £ 1.5BN loan, which continued to grow last year. The authority’s elected Mayor Jason Perry told the BBC that the council spends £ 70 meters per year to repay the loan alone.

The “disposal” list was nursery, community center and tennis clubs.

New Edgington Holiday and Community Center – Home of Boxing Club of Estate – closed in February.

According to head coach Bill Graham, the club has 300 members and they work with men and youth who will otherwise involve the crime.

Although a group of volunteers raised £ 25,000 to visit a nearby school, its future remains uncertain.

“We help reduce crime, we do not help children catch the knife,” Mr. Graham said.

“Finally, everything came down for finance – he said we need to sell our property because the situation we are in and that is.”

The Greenwich Equestrian Center was to introduce thousands of children at the South East London Boro in the wake of the 2012 Olympics in the “Joy of Horse Riding”, according to the leader of its then council.

The £ 1.6m feature opened by Princess Anne in 2013 was also to provide training courses “for many years” training courses.

But in November, the council decided to sell it despite a community bid to run it, which is now supported by more than 4,500 signature. Neither the petitioner, nor the British Ecuestrian, who helped pay for convenience, says they were informed about the decision.

Royal Boro of Greenwich Council saw an increase in its loans by £ 268m last year, largely, says, currently on its housing register to construct or buy new affordable housing for 26,000 people.

But businesswoman Tao Baker, who has planned to transfer the Center to community ownership, believes that a sales would be “short -sighted”.

She says that this loan will “barely make a dent” for the pile, she says, while the loss of the center will be felt for the coming years.

At her peak, the center was 18 months waiting list for free horse riding sessions and Ms. Baker believes that it can be easily durable with the right guidance.

But she says that the leadership of the council is refusing to meet her.

“I think the community really wants to save it, it’s not just that it is a kind of sports feature and the only Olympic feature in Greenwich, but it is a way to go about the council.

“They knew that there was a community petition to save the convenience, but they never disclosed that they were going to do so.”

Ms. Baker says that she has held several meetings with the Council Leadership in the last one year, which have not been successful. The council said that it welcomed the proposals with “any strong financial trade case displaying”.

A council spokesperson said that he welcomed any viable motion to handle the “Defunk” Equestrian Center.

He said: “Like the rest of London, we need a shovel in the ground and roofs on the heads of the people and we are proud that the capital has the highest number of new affordable houses in the capital last year.”

In the mid -2010s, the coalition government encouraged the Town Hall chiefs to broaden income currents by investing in property.

He did that by borrowing and, in many cases, the payment of the council’s investment continues.

According to Sarah Kalkin, editor of the local government’s Chronicle, “The loan is not naturally bad.” “It depends on what it is.”

He said that the councils have now withdrawn short -term private bank loans for short time “in trouble” when the interest rates were low – only grows and down the road to sting with a large rate.

The £ 1.6bn loan of the Warington Council means that it is one of the most indebted in the country for the size of its population. It used Treasury loan to buy a retail park in Manchester, a large shoe factory among other properties

The council said that under the revenue assistance grant, it had no choice but to invest to fill the difference in income received from the central government.

Although this grant has increased over the years since the epidemic, the power to spend core for local authorities is about 18% per person as compared to 2010, the Institute for Fiscal Studs found.

Warington leaders claimed to have made those investments between £ 20m per year and £ 23m – which meant that it could avoid making large cuts in services.

But the government -appointed inspectors found that the council had a “high risk” to increase interest rates and was increasingly eating in its savings. Its out-of-town investments showed very little or no public benefits for the Warrington population.

Seriously, Energy collapse in 2022This was 50% of a company, only a loss under £ 9m.

In July, the government sent ministerial messengers to bring back the finance of the council back on track.

Former city MP Andy Carter warned that the council had risked its strategy on several occasions.

“We are looking at the decisions that I do not believe that it will be taken in a commercial sense – a business shareholder will not put the money at risk,” he said.

Mr. Carr-West said that the borrowing spilling levels were eventually resulting in the council’s years.

He said, “One -third of the councils are telling us that if they do not change anything in the context of funding, they are going to bust within five years,” he said.

“It is below 50% of the councils that are telling us in 2024. So we have made some progress.”

Dr. Car-West said that there were increasing calls for the government, which outstands about 75% of the council’s loan through PWLB to write a large swath of that loan.

The Croidon Council said it was “not durable” the support received in loan and asset sales because they were simply adding [their] borrowing costs”.

A spokesperson said: “We cannot be financially sustainable and cannot fulfill our best value duty unless a solution from the government, such as writing a loan, agrees.”

No such announcement has been made about loan writing.

In June, Prime Minister Sir Kir Stmper announced One overhaul of Council Central Grant FundingPromised to simplify the complex funding formula used to distribute funds.

Labor says that its plan will re -rebuild the grant to focus on the most disadvantaged areas. It has also started work on the restructuring of two-level council areas, which are to become unique officers, along with county and district councils.

The spokesperson of the housing, communities and local government said: “While the councils are responsible for the management of their own budget, we know that the current funding system is broken, which is why we are taking decisive action so that local leaders can distribute public services.

“We have announced more new grant funds from £ 3.4bn for local services at the top of £ 69BN already provided this year to promote the finance of the council, and we will go ahead to improve the funding system, including new unique councils, to ensure that it is fit for the future.”

Additional reporting by Catherine Heston, Florence Cook and Paul Bradeshaw.