Yesterday morning the media were reporting the spin from Government officials that the budget deficit would be trimmed by £16 billion due to asset sales over the next two years. These included £11 billion from local councils. The suggestion was that Councils would be forced to sell enough assets to raise this sum and that central Government would simply seize the money.
In fact, as Chief Secretary to the Treasury Liam Byrne told the House of Commons yesterday, Councils will continue to keep all their money from asset sales – so they will do nothing to reduce Gordon Brown's budget deficit. Nor will they be forced to sell anything. The £11 billion figure is just an estimate – for three years rather than two years – based on the average annual proceeds of £3.7 billion of Council asset sales. In other words this £11 billion figure is a non story. Furthermore £2 billion of planned central Government property sales will be "reinvested." So it turns out the only asset sales that will go towards reducing the deficit amount to £3 billion – enough to fund Gordon Brown's borrowing habit for a week. Well done to The Guardian for spotting this.
So 24 hours of dismay in our Town Halls was caused simply to get headlines with £16 billion rather than £3 billion. The Government is spinning into its grave isn't it?