Could Sheffield be about to see the biggest transfer of wealth to the city’s richest in decades?

A change in government rules to allow councils to avert bankruptcy by selling off their assets could see the biggest transfer of wealth in Sheffield to the city’s richest in generations.

According to Bloomberg, Rishi Sunak’s team are “quietly consulting” on plans to allow local government to sell off assets to fund front-line services, which they’re currently barred from doing without permission from central government.

The stated aim of the policy is to help struggling councils avoid the same fate as Birmingham and Nottingham – two of the biggest local authorities to effectively declare bankruptcy after being unable to balance their books.

Most local councils in England own a wide range of assets, including their own office buildings, as well as housing stock, public parks, art galleries, commercial property and land.

“The drastic under funding of local councils was only step one of the plan,” tweeted Keir Milburn, the co-director of public ownership campaign Abundance.

“Step two is to force them to sell off public assets. Asset stripping and the forced redistribution of wealth upward to the mega rich. Absolutely blatant.”

Councils across England have experienced huge cuts to their budgets since the Conservatives came to power in 2010, with Sheffield City Council (SCC) seeing the amount it has to spend per household in the city fall by £856 during this time (a cut of a third).

Despite repeated cuts to the block grant councils receive from central government, and a ban on raising Council Tax by more than 4.99% to cover the shortfall, councils are still expected to provide high-quality “statutory services” like social care and children’s services, making it harder for them to stay afloat.

This is why the new rules could lead to a massive transfer of Sheffield’s assets from SCC, which own them collectively on behalf of the city’s residents, to some of the richest people in society, both from Sheffield and from further afield.

A recent report by the IPPR think-tank found that even under the existing rules, English councils have sold an estimated £15 billion in assets since 2010.

As of 2020, Sheffield was the tenth-biggest landowning council of England (out of 353), with 16,359 acres of land falling under public ownership (26% of the total area of the city).

This is largely for historical reasons. In the 1920s the council’s predecessor pioneered the buying of land around the city to create England’s first greenbelt outside London, as well as building a new reservoir on the outskirts of Sheffield (much of this land is now stewarded by the National Trust).

As well as land, SCC also own a lot of property in the city, including much of the upcoming ‘Heart of the City II’ development like the new upmarket hotel on Pinstone Street.

These buildings, as well as hundreds of others across the city, could be taken out of public ownership and sold to wealthy landowners and asset managers if SCC decide to use these new powers to fund frontline services.

Although Council Leader Tom Hunt recently told The Tribune that SCC is not at risk of going bankrupt, all councils in England, but especially those in big cities, are believed to be struggling to make ends meet after 13 years of austerity.

Dr Alex Bulat, a Labour councillor in Cambridgeshire described the underfunding of local councils as “a strategy, not a necessity” while Adam Bienkov, the political editor of Byline Times, said the proposed rule change was “not so much selling off the family silver as selling off the family home itself”.

Sheffield City Council have been approached for comment.