March 30, 2021
Selling the family silver
That there is never enough public finance to cover all the bases seems to be the very essence of public finance management. Difficult choices are the name of the game and part of that game seems to be a requirement to exaggerate the impact of any budget cut as if it spells the very end of life itself. Except it never does. And so, like the boy who cried wolf, we begin to disbelieve the claims. But an investigation by the Ferret has uncovered a disturbing trend in how our public finances are being kept afloat.
Scotland’s public institutions sold off more than half a billion pounds worth of land and property between 2015 and 2019, with public assets being shed to make up for budget shortfalls.
The sold property, totalling at least £584,829,652, includes housing, schools, nurseries, hospitals, care homes and healthcare clinics. It also includes community centres, town halls, libraries, public toilets, swimming pools, farms, shop units and college and university campuses.
Scottish Community Alliance, a coalition of community networks, said budget cuts had led to councils “selling off the ‘family silver’ to make ends meet” and called for “radical reform of the way that councils are funded”.
Data obtained by The Ferret through freedom of information law shows that at least 2,982 properties were sold by Scotland’s local authorities, NHS boards, universities and colleges between 2015 and 2019. A further 151 properties were sold by the Ministry of Defence between 2009 and 2019.
The Ferret is making the entire data set available to its members.
In response to The Ferret’s investigation Scottish Labour’s Neil Findlay MSP called for an end to the “fire sale” of property, while public service policy researchers warned that “our public and civic space is being reshaped” and the sales will “have a devastating impact on public services and people’s wellbeing for years to come.”
Land and property was frequently sold to property developers, as well as to individuals and companies. Some public buildings were sold or given to charities, cooperatives, community groups and others.
Public bodies stressed that asset sales were a necessary way of balancing budgets and that property was often sold when it had become redundant. Sale proceeds were reinvested in new and improved facilities or other services to better serve the public, they said.
Thirty local authorities sold 2,663 land and property assets worth £320,693,750. North Lanarkshire and South Ayrshire councils did not provide any information about property sales while Aberdeenshire and Clackmannanshire withheld the sale prices and buyer details.
Among the assets sold off across Scotland were 39 leisure centres, seven swimming pools and four outdoor centres, although in 10 cases ownership was transferred to community groups, often for a symbolic price of £1.
One of the most high profile sales saw the popular Leith Waterworld sold to a property firm for £1.85m. Campaigners who made a rival bid to save the pool accused the council of “squandering” public assets.
Other facilities, like the Alva Pool in Clackmannanshire were transferred to the community, or, like the Wick Leisure Centre, moved to other venues. The former Montrose pool was transferred to the Montrose Playhouse Project, which turned the building into an arts centre and cinema.
Of the seventeen libraries sold by councils, only two – in Crieff, Perthshire and Langholm, Dumfriesshire – were given to community groups. In the most high profile case, Edinburgh City Council sold part of its Central Library to property developer Jansons for £3.5m, with planning permission for a Virgin hotel later approved.
Locals argued that the hotel will ruin views and block light from the remainder of the library, and that Edinburgh was being swamped by new developments at the expense of public land. Meanwhile, Unesco warned that the hotel and other developments threaten the capital’s world heritage status.
The Scottish Library and Information Council claimed that library closures are “not always an indication of the public library service being diminished.” Chief executive Pamela Tulloch said several new and refurbished libraries had opened in recent years and that others had closed to cater to a demand for digital services.
Some 23 public toilets were also sold by councils between 2015 and 2019, according to the data. Unite the union has warned that toilet shortages disproportionately affect workers in driving jobs who rely on them. In 2019, the Royal Society for Public Health (RSPH) found that one in five go outside less frequently due to toilet shortages. This rose to two in five among people with conditions requiring frequent toilet use.
RSPH chief executive, Christina Mariott, told The Ferret that when toilets were closed during Covid-19, “the very real risk to hygiene and sanitation that not having these facilities available became abundantly evident”. Now, she is concerned that even more have since been closed.
“We are concerned to hear reports that a third of Scotland’s remaining public toilets faces being closed or sold off as we know the impact will fall disproportionately on people with ill health or disability, the elderly, women, outdoor workers and the homeless”, she said. “These potential closures are a reminder of our desperate need for proper investment into our civic infrastructure to enable equitable access to life outside the home.”
Just months before the pandemic, Audit Scotland warned that most councils were increasingly relying on reserves to keep services running and balance budgets. The Ferret’s data shows that, between 2015 and 2019, Dundee City Council sold more than a sixth of its property assets. The Western Isles sold nearly the same proportion, while Stirling sold more than a tenth of its land and property.
Western Isles Council said that the majority of sold properties were “being returned to community use or housing”. Despite financial pressures, asset sales were “not driven by cashing in on local or national treasures” and sell offs were “likely to continue, and possibly increase, as flexible working opportunities become normalised”, said a spokesperson.
“It is important that we can continue to recycle these assets into appropriate uses that benefit the local communities and economy, rather than let them become liabilities and further financial burdens”, they added.
Stirling Council said that its property sales followed “a transparent process which involves all stakeholders in accordance with appropriate legislation and policies.” A spokesperson stressed that from 2015 to 2019, “the vast majority” of its sold assets were council houses sold under the Right to Buy scheme, which the Scottish Government ended in 2016.
Other sales ranged from “the transfer of land to facilitate the extensions of private gardens, to the sale of land to social landlords for housebuilding”, they added. “Stirling Council is not pursuing a policy of selling land or assets to plug funding gaps and all disposals covered by this period represent business as usual procedures.”
Dundee City Council did not respond to our request to comment.
A spokesperson for COSLA, which represents Scotland’s local authorities, said asset sales were “rightly and properly a matter for local determination, based on local need and circumstance. “Scotland’s councils have a responsibility to balance budgets and manage assets efficiently,” they added.
Colleges, universities and NHS boards
Some 166 land and property assets were sold by Scotland’s NHS boards, including 34 hospitals and 30 healthcare clinics. Other assets sold included care homes, dental surgeries, mental health clinics and medical staff accommodation. NHS Tayside sold 28 per cent of its property, Fife and Ayrshire and Arran sold nearly a quarter and four others sold a sixth or more.
In 2018, Audit Scotland said “urgent action” was needed to reverse the declining performance of the NHS, including the need for “longer term financial planning”. In February, it estimated that the pandemic would cost the NHS £1.67bn in 2020/21 alone.
NHS boards told The Ferret that any sold properties were either no longer suitable or required, with services transferred and sale proceeds reinvested in new or improved facilities. All sales had complied with national protocols directed by the Scottish Government and were externally audited to “ensure best value”, they said.
NHS Tayside argued that it “continues to have one of the biggest Health Board property footprints in Scotland” and had no plans to sell more property to balance its next budget.
Meanwhile Scottish universities sold 53 assets worth £83.76m, while colleges sold 115 assets totalling at least £26.27m. These included campuses, housing, land plots, office buildings and car parks. Scotland’s Rural College – which accounted for 88 college asset sales – and the University of the West of Scotland declined to reveal their sale prices and buyer information.
Universities Scotland, which represents Scotland’s higher education institutions, said its members have “an overwhelming capital maintenance backlog” of more than £850m. “The strategic review and sale of assets they no longer require is a drop in the ocean of that much bigger funding challenge,” said a spokesperson. “All proceeds are reinvested in addressing that challenge and universities’ wider teaching, learning and research needs.”
The colleges sector body, Colleges Scotland, argued that property sales were “a normal part of estates management” and “can be part of the overall strategy to allow new buildings and renovations to be affordable.” A spokesperson said: “Investment in modern facilities improves the learning experience for students, and the working environment for staff.”
Following The Ferret’s investigation, concerns have been raised about the extent of the sell off, with campaigners and the Labour MSP Neil Findlay calling for a new approach of how public land and property is managed.
“This is brilliant work by The Ferret showing land and public assets being sold on an unprecedented scale at the same time as we have a housing crisis across the country”, said Findlay. “There is little doubt that these sales are all tied up with cuts to budgets and public services with health boards, councils and others forced to sell land to plug funding gaps.
“The Scottish Government and public bodies must come together to stop this fire sale of assets and plan how we can use public buildings, land and community assets to regenerate communities, provide jobs and most importantly, housing for those in need.”
A spokesperson for the Public Matters group, which campaigns for public ownership of key services, said: “We welcome this research, as the data on sale of public property across all government departments can be hard to establish.
“Nonetheless it has been estimated that over 50 per cent of all public property has been sold or given away over the last 30 years. This troubling research shows that process is accelerating in Scotland.” They added: “Our public and civic space is being reshaped. We are being excluded from places we could once rightfully occupy. There should be far greater awareness of this.”
We are going to run out of assets to sell. We need radical reform of the way that councils are funded.
Scottish Community Alliance, a coalition of Scotland’s community networks, said that while sales proceeds can be used to “acquire new or refurbished public assets”, the data suggests “that councils are facing huge budget deficits and are selling off the ‘family silver’ to make ends meet and to balance the books.”
“You don’t have to be a financial genius to realise that this can’t be a long term solution”, said Angus Hardie, the alliance’s director. “We are going to run out of assets to sell. We need radical reform of the way that councils are funded. This means local tax reforms that empower councils rather than emasculate them as they have just been yet again with the instruction from the Scottish Government to freeze council tax.”
Hardie added: “In Nordic countries the municipalities raise the taxes themselves and pass a proportion up to the state government. They become democratically accountable for the tax and spend policies. Here it’s the other way round. Completely top down.”