Economic News

LONDON (ShareCast) - Gordon Brown has confirmed the government plans to sell off £16bn of state assets to help trim its soaring debts.

The announcement immediately attracted a wave of criticism from local authorities, which will have to generate most of the money.

Assets on the block in the first wave of sales include the Tote, the Dartford Crossing, the student loan book, Channel Tunnel rail link and the government's 33% stake in uranium enricher Urenco, the prime minister said.

Sales of these could take place within two years Brown added, though he admitted the bulk of the money, some £11bn of the £16bn, would come from local authority asset sales and sales of land owned by government departments.

The burden on councils sparked an angry response from the Local Government Association, which predicted a wave of sales of playing fields, libraries, and other community assets to meet the government's targets.

"As a matter of routine councils sell off unwanted assets but always make sure that they get the best value for money for the local taxpayer. Local government will dispose of assets if they are not required but, given the current financial climate, this is not a good time to sell," Margaret Eaton, chairman of the LGA said.

Gordon Brown added the sell-off was part of its package to reduce the UK budget deficit that included tax increases. He claimed the disposal programme will help finance new capital investment and pay down debt.

The government is under intense pressure to come up with a plan to reduce the UK budget deficit, which is set to reach £220bn or a huge 12% of the UK's GDP.

The Conservatives revealed detailed plans last week to cut that figure by a freeze on public-sector pay and a higher retirement age.