According to a recent survey of local authorities, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
The group noted that a significant number of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on restructuring services and using savings to manage increasing fiscal pressures.”
Specific Cases of Planned Disposals
One local authority in Kent announced its property management strategy included the sale of a shopping centre in a local town and a social club in another town to generate 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Rises and Wider Fiscal Strains
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these require time to deliver both better provisions and financial savings,” said a council leader.
He added: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
A survey of county councils recently also found local finances being stretched by the growing number of young people and older individuals needing Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (IMD) covering English councils, many participating urban areas were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the scale of difficulties facing municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and demand,” stated a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey found.