UK local governments selling off public assets in face of austerity-driven budget cuts

I have mentioned from time to time how local governments in the UK have been devastated by cuts to their budgets by the national government, justified by austerity, or the non-Keynesian approach to macroeconomic fiscal policy focused on reducing government expenditures and deficits rather than expanding the economy in the face of economic downturns.

Arguably, a justification for austerity derives from neoliberalism and its ideological position that government action and spending is always inferior to the market.

From the Guardian article "Neoliberalism's 'trade not aid' approach to development ignored past lessons: Neoliberal development policy was radical and abstract, but its uncompromising approach proved dangerous in the real world":

Neoliberalism is often used today as shorthand for any idea that is pro-market and anti-government intervention, but it is actually more specific than this. Above all, it is the harnessing of such policies to support the interests of big business, transnational corporations and finance. It seeks not so much a free market, therefore, as a market free for powerful interests.

Similarly, the flip side of this is a focus on outsourcing government functions to the private sector and private financing, both of which have been shown to be more expensive and often less successful than if these functions were handled by government.

-- "Failure of outsourcing in Great Britain," 2018
-- "How part-privatising the UK probation system backfired," Financial Times

UK austerity is also in the news, with claims that cuts in budgets for policing have contributed to a rise in crime more generally ("UK Police Are Stretched by Austerity," New York Times) and more recently, knife crime ("K Knife Crime Rises. Are Budget Cuts to Blame?," NYT).

UK local governments have experienced cuts in budgets up to 60% and that combined with the double whammy of also being financially responsible for elder care, this has driven many governments to bankruptcy, but also selling off property.

The problem is exacerbated by restrictions on local taxation, especially taxation of residential property, which is undertaxed.

The Guardian reports ("Great British sell-off: how desperate councils sold £9.1bn of public assets") on a study of this phenomenon conducted by the Bureau for Investigative Journalism and HuffPost UK.

The article discusses putting up various civic assets up for sale such as the Stretford Public Hall in Trafford and the Moseley Road Baths in Birmingham.

Both these buildings ended up being taken over by community nonprofit initiatives, with support from the nonprofit Locality and their Save Our Space campaign. From the article:

“Part of the problem is a lot of councils don’t have policies in place to think about alternatives to selling off properties to the private sector,” says Tony Armstrong, Locality’s CEO. “Councils are under a huge amount of pressure, and we definitely sympathise with them, but when they look at plugging these budget holes in the short term, once they’ve done that, they can’t do it again - and these places are lost forever.”

In a period of austerity, non-profit making services are “just seen as a drain”, Armstrong says.

“It probably sounds like jargon, but we talk about this concept of ‘social infrastructure’. It’s common sense really, but what brings communities together is the common experiences that we share, and a big part of that is the tangible, physical places where we get together.”

Also see these past Guardian articles:

-- "These squares are our squares: be angry about the privatisation of public space," 2017
-- "Britain's cash-strapped councils and the great Civic Centre sell-off," 2017
-- "Councils forced to sell off parks, buildings and art to fund basic services," 2018
-- "In the frame: two radically different plans for civic art collections," 2019

This is an issue for local government in the US, not so much with public buildings and park space, although it does happen, but with services and infrastructure, such as Chicago's disastrous long term lease deals for its public parking structures and parking meters. The city was driven to make a fast deal because they needed money to plug a $2 billion budget deficit.

-- "Financial engineering for municipalities," 2011
-- "A lesson to cities that they need to be very careful when leasing assets to public private "partnerships"," 2012
-- "Chicago's ongoing debacles: parking and governance," 2013

This also comes up with outsourcing and similar kinds of deals concerning speed cameras, parking meter revenue collection, etc.

At the federal level, outsourcing is a big deal, and hyper problematic, from the management of "camps" to house undocumented immigrants ("Are US immigrant child detention centers "concentration camps"?," Quartz) to privatized prisons (Private Prisons in the United States, The Sentencing Project)