Asset stripping

And for my next criticism...

I find it difficult to rant about the things I should rant about. Oliver Letwin wants to spread fear in the public sector; I raise my eyebrows. Francis Maude calls it ‘absurd’ that people in the public sector should be paid the same as their equivalents in the public sector and I let out a tired but resigned sigh.

However, when Eric Pickles takes the opportunity of a quiet August Friday morning, when the news should be filled with previewing some form of sporting endeavour and commenting on a piece of toast with Britney Spears’ face on it, to claim that councils should be on an asset sell off I think my blood almost boiled.

What state of ridiculousness does this man live in? Could he not take August off from bashing councils and maybe focus on building some bridges with local government? Could he not have simply focused on the admirable aim of open data hiding behind his headlines?

The stupidity of his statements about councils selling off their assets (apparently shops, pubs and golf courses were his, easy, targets de jour) almost requires no response but here goes anyway:

1)      Selling off assets only releases a one off capital receipt. Thus, it might be possible to use one to fill a budget gap in year 1 but in years 2 and 3 that figure needs to be recouped in full, along with the other cuts needed for that year. In other words it simply delays the inevitable.

2)      If the asset is bringing in revenue then selling it removes that revenue from a council’s income stream and leaves them needing to find even more money to balance the budget in years 2 and 3.

3)      The property market, allied to the economy, is in a slump. Only an idiot, or a desperate man, sells off his assets when the market is weak and the assets are at their lowest value.

4)      Assets are usually connected to services that the public value. If the council owns a boating lake or a golf course the chances are that they are there to provide a service that the public value. They usually make a small profit and provide value for the public. Selling them loses that value.

The debate about rationalising buildings (which was hidden in some of the official comments from the DCLG) is an admirable one but is, as the LGG pointed out, one that councils have been doing for some time now; often in the face of DCLG criticism.

Indeed, if Eric is so concerned about asset realisation than maybe he should hold his tongue next time a council like Newham (in London) build themselves a new civic centre in order to release all of the other small assets that previously made up the council accommodation thus savings themselves millions of pounds. 

What’s annoying about this August offensive is that the underlying principle is right.

Councils should understand their asset base in a lot of detail. They should be constantly looking at how to maximise use of that asset base; by sharing facilities, office space or public access points with other providers for example. And making that information public on an easy to use map is also of real value to our local residents. Indeed, I’d urge you all to check out the map and also to try and persuade your council to make use of it.

However, as is always the case, Mr Pickles just couldn’t resist taking an otherwise positive story and using it as an attack on Local Government. The fact that the attack was so blatantly ill-judged doesn’t diminish the fact that once again he started the day creating a public mood of ill feeling towards local government up and down the country.

Let’s hope that this week Mr Pickles does his best to be nice to local government. Perhaps he could praise some things that are being done and not use that to take a pop at other councils.

As that is unlikely to happen I just hope that next Friday morning brings me a test match update and a hard-boiled egg with Eric Pickles face in it: Now that would be a good August news story!

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4 Comments on “Asset stripping”

  1. Will Says:

    I think I had the same overall response to our blogger here when I first heard it on the Today programme as I got dressed for work. It’s unfortunate that the Ministers default combatitive position leads to develop a Pavlovian response of ‘la la I’m not listening Eric’ every time I hear his flattened tones. This isn’t considering a colleague described him as ‘being able to start a fight in an empty room’. What is suprising is the information in the map which turns out is quite an illuminating tool. I live in an other authority to the one I work in and was suprised to learn what buildings the Council owns (incl pubs and private offices). Perhaps greater transparency in this area could lead to greater incentive to make best use (both community and commercial) of assets?

  2. neilhind Says:

    Agree with Will that the online tool looks really good and does show some interesting things. I for one hope councils do embrace this and map all their assets. I know a lot are still missing,

    The transparency aspect is also important – what about councils publishing what the rents are and details of leases? I know this needs to be balanced with “social income” (could list voluntary groups/charities that use) but I’ve been discussing one building with a council that I know has a £1 per annum peppercorn rent and could be generating much more!

  3. […] decision not to renew annual contracts worth £118,000 with People First Lambeth.• Asset stripping, an excellent response on the We Love Local Government blog to Eric Pickles’ call for […]

  4. […] being irritated by the surrounding sound-bites and interviews he does when he launches it (see asset registers as an example). These ill thought through rants might get him a headline for a few hours but every time he does […]

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