Based on a recent poll of local authorities, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% of councils are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and open spaces to support their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on restructuring services and utilising financial reserves to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Pressures
This research of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of councils will have to raise council taxes next spring to address the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and financial savings,” said a council leader.
He continued: “There are demographic pressures which will continue 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 very challenging.”
Countrywide Trends and Projections
A survey of county councils this week further found local finances being strained by the growing number of young people and adults needing Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study found.
