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Town halls across the UK are being forced into humiliating fire-sales of the buildings and services that once formed the backbone of their communities.

Schools, care homes, leisure centres, even Olympic legacy sites — all have been or are being sold off at knock-down prices, to plug the gaping holes in council budgets.

The BBC has laid bare the scale of the crisis: councils have been saddled with £122 billion in debt, equivalent to £1,700 for every UK resident.

Local leaders admit they are running out of assets to sell, yet debt repayments still consume vast portions of their budgets.

But how did we get here? Why are the institutions that once held our communities together being dismantled, piece by piece, and handed to private buyers? The answer is political, not accidental.

This crisis is the direct result of a long-standing Conservative strategy known as “Starve the Beast.”

Starve the Beast

The idea is brutally simple: if you want to shrink public services but can’t win public consent to shut them down directly, you cut off their funding instead.

Deprive them of resources, force them into debt, and you can watch them collapse under the weight of their own obligations – at your leisure.

This was the logic that guided the Conservative–Liberal Democrat coalition of 2010–15. Remember the Con-Dem government?

Under the banner of austerity, central government grants to councils were slashed by nearly 60 per cent in real terms.

Local authorities — legally required to balance their books — were left with two options: cut frontline services to the bone, or borrow to keep going.

Many chose to borrow. Encouraged by the Treasury, councils dipped into the Public Works Loan Board, taking out loans to fund property developments and commercial investments. For a while, this offered a lifeline.

But when the Covid-19 pandemic struck, interest rates rose, and several projects failed, the façade crumbled. Councils were left holding enormous debts, with little to show for them.

Now, unable to raise enough revenue from central government or local taxation, councils are being pushed into “capitalisation directions” — effectively permission slips from Whitehall to sell off public assets just to pay for day-to-day services.

Dr Jonathan Carr-West of the Local Government Information Unit likened it to “payday loans for local government.”

Once the assets are sold, they’re gone forever — the public value they represented is lost, and the community is left poorer. This was always the logic of austerity.

By starving councils of the funds they need, the Conservatives created a situation in which the state itself appears incompetent – which was certainly true… under the Conservatives.

Services degrade, debt rises, and eventually, the public is told there is no alternative but to privatise what remains.

It is not mismanagement. It is strategy. Strategic incompetence.

The culprits

Once councils are forced into flogging their property portfolios, the next question is obvious: who’s buying?

The answer is as depressing as it is predictable: the very rich.

Community centres, schools, leisure facilities, even housing stock… Once sold, these buildings don’t vanish. They change hands. And it is not ordinary people who have the capital to snap them up. It is hedge funds, property developers, private equity firms, and wealthy landlords.

Former trader Gary Stevenson has been sounding the alarm about this process for years.

He describes it as a vicious cycle: public goods are stripped away and transferred into private hands, only for the public to end up renting them back at higher cost.

• A leisure centre that once operated at cost under council management becomes a private gym with fees many can’t afford.
• A school that stood as a public asset becomes part of an academy chain, its land and buildings leveraged for profit.
• Care homes once run for community benefit are flipped to corporations demanding double-digit returns for shareholders.

The public is forced to keep paying — but now through inflated rents, service charges, and user fees rather than fair taxation.

What little money councils claw back from their fire-sales barely makes a dent in their debt burdens. Croydon’s £210 million asset sell-off, for instance, covered just 15 per cent of its £1.5 billion debt.

The community loses its facilities forever, while debt repayments continue to climb.

Stevenson argues that this is not simply a fiscal failure but an economic transfer of staggering proportions — from the poor and middle classes to the already wealthy.

Every sale shifts power and resources further towards those who already own too much.

Because these new owners often demand higher returns, the public ends up paying more for less.

It is, in Stevenson’s words, “a machine for inequality.”

This isn’t just about Croydon.

Warrington Council borrowed heavily to buy retail parks, haulage depots and even part of an energy company, only to see investments collapse and debts spiral to £1.6 billion.

Greenwich has been flogging Olympic legacy facilities.

Across the country, billions of pounds in public assets are being sold off — £2.9 billion over just the past two years, according to the BBC.

The pattern is the same everywhere: public wealth becomes private wealth. Communities lose their institutions. The rich gain new revenue streams.

And so we are left with this central question: if austerity deliberately starved councils, and asset sales are funnelling wealth to those who already have too much, what can be done to break the cycle?

Wealth taxes – the way out

If austerity created this crisis and privatisation is deepening it, then the only honest question is: how do we reverse the flow of wealth?

The answer lies in taxing it.

Former Labour – and then Independent – election candidate Faiza Shaheen put it bluntly in The Guardian: Rachel Reeves needs cash fast, and a wealth tax is one of the fairest ways to raise it.

Her proposal is straightforward: levy two per cent annually on individuals with more than £10 million in net wealth.

This would affect only the super-rich, yet polling shows it has overwhelming public support — even among voters for Reform UK.

But Vox Political argued – only yesterday – that we cannot stop there. Wealth taxes on their own risk being slow, patchy, and vulnerable to evasion through offshore trusts and clever accounting.

To really deliver fairness, we must go after not only the stock of wealth (the dynastic fortunes hoarded by billionaires) but also the flow of wealth — the income those assets generate year after year.

That means a capital returns fairness package:

• Equalise capital gains tax with income tax, so the rich pay the same on profits from speculation as workers do on wages.

• Surcharge unearned income from dividends, rents and interest, while protecting ordinary savers.

• Cap pension tax relief at the basic rate, ending a subsidy that overwhelmingly benefits the richest.

• Apply VAT to financial services, an industry playground for the wealthy that currently escapes fair taxation.

• Reform council tax with new higher bands for luxury homes, so the owners of mansions stop paying proportionally less than people in modest terraces.

Taken together, these measures could raise tens of billions of pounds every year — money desperately needed to restore local services, cancel crippling debts, and rebuild the public realm.

More importantly, they would reverse the flow of wealth that has been draining communities for decades.

This is the real choice before us:

• Do we want to continue punishing work while protecting wealth?
• Do we want to keep selling our schools, leisure centres and care homes to billionaires, only to rent them back at a markup?
• Or do we finally want a system where all income — whether earned in sweat or in stocks — is treated equally?

Austerity starved our councils. Fire-sales fed the rich. Only bold taxation of wealth and capital returns can turn the tide.

Rachel Reeves says she has no choice. But she does. What she lacks is the courage.

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