According to a recent poll of local authorities, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK stated that six out of ten of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and open spaces to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and using financial reserves to manage growing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in Kent announced its property management strategy featured the sale of a retail complex in a local town and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Rises and Broader Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase local levies next April to cover the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
Research of regional authorities recently further found council budgets being strained by the growing number of children and older individuals needing Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a white paper setting out those changes has been postponed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (IMD) covering English councils, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The figures highlights the scale of challenges confronting local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the study found.
