Based on a latest study of local authorities, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils for major urban areas in England stated that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling public land and open spaces to support their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of authorities seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to weather growing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its property management strategy featured the sale of a retail complex in Rainham and a social club in Rochester to raise £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Increases and Wider Fiscal Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase local levies next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both improved services and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
Research of county councils recently further found local finances being strained by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) for English councils, many key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The figures highlights the scale of challenges facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and demand,” said a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
