Based on a new survey of local authorities, English councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and open spaces to support their budgets, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
The group said that a significant number 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 restructuring services and using financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in southeast England said its asset disposal plan featured the sale of a retail complex in a local town and a social club in Rochester to generate 20 million pounds over the next half-decade.
- 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.
Local Levy Rises and Broader Fiscal Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase local levies next spring to address the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after steep rises 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,” stated a council leader.
He continued: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of county councils this week further found local finances being strained by the increasing figures of children and adults requiring Send support.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in 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,” said the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The data highlights the extent of difficulties facing municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey found.
