Who springs to mind when you think of victims of the credit crunch and property crash? Repossessed homeowners? Northern Rock shareholders? How about local authorities, who lost a cool £2.6bn in capital receipts last year?
New figures published by the Communities and Local Government department today reveal that total receipts fell 65% from £4bn in 2007/08 to just £1.4bn in 2008/09. Housing accounted for almost half of the losses, with capital receipts from housing fell 73% from £1.7bn to £466m.
The slump is not unexpected - it was revealed in an exclusive poll in Inside Housing in February - but still shocking. Receipts have been falling since the government cut right to buy discounts but actually saw a modest increase last year before falling off a cliff.
To put the figures in perspective, the total amount local authorities so prudently invested in Icelandic banks was just under £1bn. And capital receipts have fallen by more in percentage terms than mortgage approvals. Only 12 months ago the government was forecasting that they would be pretty much the same as last year.
The figures also show an 11% fall in capital expenditure on housing by local authorities, from £5bn in 2007/08 to £4.4bn. But that was only half the £1.2bn slump in housing capital receipts. The slump is yet another reminder of the vicious spending squeeze to come.
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