Britain's public wealth and health are up for sale again

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Britain has an endless supply of family silver to sell. Unlike some earls and duchesses, who find they are down to their last Rubens and must sell the estate to make ends meet, the creative folk in Whitehall never run out of options.

© Provided by The Guardian Photograph: Jacob King/PA

Local authority land provides an inexhaustible supply of assets, and it has never been more available than now, as the pandemic careers through council finances like an out-of-control double-decker bus.

So far, eight councils have found themselves signing loan deals with Robert Jenrick, the housing, communities and local government secretary. The agreements give councils much-needed cash, which will be repaid with funds that in every case can only come from land sales.

Most of the councils affected made mistakes betting on commercial ventures that went wrong, but their financial position is merely at the extreme end of a spectrum of fiscal jeopardy that has ensnared hundreds of local authorities.

They are broke because their spending to support households and businesses through the past year, married to a colossal loss of income, has been desperately underestimated by Jenrick’s officials.

The National Audit Office says the shortfall is about £600m. Councils put the figure nearer £2bn. Whichever is right, there is a whopping hole in council balance sheets. That’s why so many have dipped into their reserves, and put up council tax by the maximum of 5% to bridge the divide between income and spending.

© Photograph: Jacob King/PA The housing secretary, Robert Jenrick, has signed loan deals with eight councils that will have to be repaid via sales of public land.

Jenrick is unperturbed. If anything, the pandemic and his parsimony are creating fertile ground for the residential developments that are his department’s lifeblood.

He will not be measuring his success on the number of parks he funds, or an increase in urban biodiversity. Jenrick uses only one yardstick: his target of building 300,000 homes each year in perpetuity.

There is always more, if you know where to look. It’s the same when ministers look around for less tangible things to sell – such as contracts that tie Britain’s taxpayers to commercial agreements for decades

Planning reforms that will designate areas for development are still going ahead, even if the algorithm that was going to automatically override council officers has been junked. And while his officials talk of beauty and place-making in brochures advertising the building drive – even in the midst of the pandemic – there is no sign of either in the new-build homes under construction. They are mostly as pokey and uniform as ever, with little regard for outside space other than tiny balconies and car-park areas.

Needless to say, the sale of yet more publicly owned land means dreams of offering young people co-working space in disused council-owned offices, or of empty shopping parades hosting small businesses, cannot be realised when the freehold is going to the highest bidder.

A brownfield city-centre site that might have become a park is more likely to become yet more flats for rent, and the rent will be the highest it is possible to charge.

The same applies to assets held by the NHS. Between 2017 and 2019 the health service was forced to offload £2bn worth of land, again mostly to developers of residential properties.

There is always more, if you know where to look. It’s the same when ministers cast about for less tangible things to sell – such as public contracts that tie taxpayers to commercial agreements that run for decades.

These are the sons and daughters of the private finance initiative, still gobbling up the funds of hospitals and schools forced to sign expensive contracts in return for shiny new buildings. PFI contracts might have been abolished in 2018 by former chancellor Philip Hammond, but the desire of Tory ministers to turn government into one large hire-purchase agreement continues.

The term “financialisation” was coined to capture this mindset – one that has its roots in the privatisation of state enterprises in the 1980s, the demutualisation of building societies and mutual insurers in the 1990s, the rapid deployment of PFI contracts in the noughties and the austerity of the post-crash era that meant public services were cut and things as diverse as childcare, dentistry, student accommodation and elderly care became the preserve of private enterprise.

In many ways Boris Johnson’s administration appears economically benign. But there is great danger in being fooled by its incompetence. Jenrick is not the only minister on a mission to invite private business to carry out what was once provided without a profit motive.

An invasion by US private health firms is under way, 30 years after these behemoths – many of them among the most profitable businesses in the world – first lobbied the Major government for access to the UK during the mid-1990s. Since February, the Centene Corporation has been in control of 58 GP practices serving almost 500,000 people. More deals are on the way – especially on new developments, where including a GP practice can swing a deal in a developer’s favour.

Campaigners claim this is “privatisation of the NHS by stealth”. They are not wrong.

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