Roll up for the great council sell-off

When Jessica Ennis took gold in last summer’s Olympics some of the loudest cheers came from her Don Valley Stadium training ground.

Crowds had gathered in front of a big screen throughout the afternoon and as Sheffield’s golden girl eased past her rivals it seemed the history of the arena had come full circle. Built to host the World Student Games in 1991, it had now helped to produce its very own champion.

For those looking for proof of sporting legacy, Ennis was it, but the figures for Don Valley have never added up. While it is now the second largest athletics stadium in the country, it has neither made its presence felt on the international athletics circuit nor found an alternative use.

For a while it provided a temporary home for Rotherham United, it has been used by rugby league’s Sheffield Eagles and occasionally transformed itself into a concert venue. However, the odd appearance by the likes of the Rolling Stones and Arctic Monkeys was never going to be enough to transform its fortunes, and according to documents made public this week the end could be nigh for Don Valley.

Each year the stadium devours a £700,000 subsidy and with Sheffield City Council having to save £50m in the next financial year following Government cut backs, that kind of outlay is fast looking like a luxury the city may not be able to afford.

Closing the site and reopening a smaller stadium just a few miles away would save the council an estimated £500,000 a year and while the proposal is just one of hundreds on the table, it’s not just Sheffield council which is looking at what it might be able to do without.

According to Government figures, public sector assets total an estimated £385bn, with almost two-thirds belonging to local authorities. While all 87 councils in England have an extensive property portfolio, many also own golf courses, hotels, cinemas and sports club. One even has a sailing club on its books.

The sale of any landmark building or facility is likely to be met by opposition, but with spending cuts now predicted to reach into at least 2019, many Yorkshire councils will insist they have no option but to sell up.

“Councils have already saved taxpayers a quarter of a billion pounds by teaming up to deliver frontline services such as social care and waste disposal as well as back office functions like human resources to legal services,” says Peter Fleming, chairman of the Local Government Association’s improvement and innovation board. “It is predicted a further £169m will be made in the coming years, but finding additional savings becomes harder not easier with time.

“Local government was already the most efficient part of the public sector and collectively councils are pushing extremely hard to find new savings. Sharing services will soften the blow, but they will not off set the cuts councils are facing.

“While individual councils have to decide whether selling assets is the best way forward, the fact is they are facing some very stark choices. The proposed cuts will have an impact on the services councils are able to provide, particularly when set against the rapidly rising cost of delivering services like adult social care.”

In wake of the Don Valley Stadium proposals, Ennis’ coach Tony Minichiello made a case for keeping first-class facilities. Tweeting a picture of youngsters gathering for a busy training session at the nearby English Institute for Sport, the inference was clear. Remove one link in the chain and Sheffield’s claims to be a city of sporting excellence will be weakened.

However, the Taxpayers Alliance has long called for councils to be ruthless when it comes to deciding which of their assets should stay and which should go and refutes any argument that the current economic climate would see local authorities short changed.

“It seems to be common sense that if a council has assets it doesn’t need, which are currently lying empty or which are an obvious drain on limited resources that they should be looking to sell them,” says John O’Connell, research director for the alliance. “There are those who say that it is far better to hang onto property and land until the market picks up, but when will that be?

“Even the best economic analysts can’t predict when the economy will recover, so councillors haven’t got a hope.

“Even if they hold onto these assets for another two years there is no guarantee that they will be worth any more than they are now. Surely instead of paying the maintenance costs, which can in themselves be astronomical, isn’t it better to get them off council books and back into the productive economy?

“There is no getting away from these kind of tough decisions, but the fact is councils are still spending a great deal of money on things like mileage allowances which are often much higher than the rate recommended by Her Majesty’s Revenue and Customs and they should be looking at every single area of expenditure to find cut backs.”

In York, the council has already sold off a key site to developers, offices which will be left redundant when staff move into new council headquarters in March are being eyed by a hotel chain and only this week the city’s cabinet approved plans to push ahead with plans to transfer the running of York libraries into the hands of a social enterprise.

“It has taken just over 20 months to turn what was a run-down listed building into a modern, energy efficient offices,” says a York Council spokesman of the new headquarters. “When the building is fully occupied it will complete the council’s programme to reduce the number of its office buildings from 17 to just two and will realise significant cost savings – more than £17m over the next 25 years.”

There is no doubting that councils need to find ways to save money, but there are fears that while selling off the family silver could bring an immediate financial boost, it may ultimately prove a false economy.

Towards the end of last year Tower Hamlets Council announced it was planning to sell a sculpture by Henry Moore which it had acquired in the 1960s for just a few thousand pounds. Draped Seated Woman is currently on loan to the Yorkshire Sculpture Park and art experts estimated the work, known affectionately as Old Flo, could go for anything between £5m and £20m. To a cash-strapped local authority it seemed like a no-brainer, but selling off cultural and historical assets to the highest bidder may yet come back to haunt councils.

“The fact is fire sales are rarely in the long-term public interest,” says former leader of York Council Steve Galloway. “Look at the Hungate site [in York], which was sold for £2.2m. On paper that’s a lot of money, but it was 40 per cent short of the original target of £5m. One of the arguments was that part of the site will be used by an insurance company, which will generate jobs, but I think there is a definite question as to whether the taxpayer got value for money in that particular case.

“Like a lot of money-saving measures, there is an element of smoke and mirrors. Take social enterprise. Very often when a service like libraries is transferred to an outside group, the amount of money a council spends monitoring that their legal obligations are being met in terms of public access means the actual savings are negligible.

“I’m not saying it can’t work. A few years ago, the Museums Trust was set up to take over the running of York Art Gallery and a number of other venues. That status can make it much easier to apply for grants and access money that councils simply can’t, but it’s far from a cure-all.

“All councils have to be realistic about what they can do and council leaders have to be prepared to say, ‘no’ to proposals that towns and cities simply cannot afford and they must also remember that whatever is sold off now will be gone forever.”

Stadium may pay the price

Don Valley Stadium opened in 1991 at a cost of £29m. However, in 2011 the full cost to the city of that year’s World Student Games was revealed to be £658m.

The debt is not due to be paid off until 2024 and in the meantime Sheffield City Council will have to make savings totalling £50m in the next financial year.

As well as encouraging councils to look at what assets can be sold off to plug deficits, Communities Secretary Eric Pickles has also published a guide listing 50 money-saving ideas. They included hot desking, cancelling away days in ‘posh’ hotels, opening pop up shops in spare office space and perhaps most controversially scrapping the post of chief executive.