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A recent investigation by the BBC has uncovered a concerning trend of councils across the UK selling off public assets to address their growing debt burdens. Struggling councils are resorting to offloading a variety of facilities, including schools, care homes, sports clubs, and even an Olympic legacy equestrian center. The total council debt has now reached a staggering £122bn, prompting calls for a long-term solution to address the issue of mounting debts.
The UK councils have the option to borrow money from banks or the government for various projects aimed at improving their regions, from constructing new schools to maintaining infrastructure and housing. Over the past decade, councils have ventured into investments like shopping centers, office parks, and solar farms, using borrowed funds from the Public Works Loans Board. Despite attempts to curb borrowing for commercial purposes, debt levels continue to rise, with combined debts growing by 7% last year and now amounting to £1,700 per UK resident.
Notably, authorities typically cannot sell off assets to fund day-to-day services like waste collection and social care. Yet, an increasing number of financially strained councils are being granted powers to sell assets and secure short-term loans to maintain essential services. Last year, 30 councils received such powers, up from 19 the previous year. The sale of £2.9bn in public assets over the past two years has disproportionately affected councils with higher debts, raising concerns about the erosion of public value and the transfer of assets into private hands.
In Croydon, south London, the local council’s debts have soared to £1.5bn, leading to the sale of public properties totaling £210m over the past four years. However, the proceeds from the sale are woefully inadequate to
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