Based on a new survey of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of public land and land to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in Kent announced its property management strategy included the sale of a retail complex in Rainham and a community venue in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Strains
The survey of councils in the coalition, which includes several urban centers, also found that over seven in ten of authorities will have to increase local levies next spring to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
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 extremely difficult.”
National Trends and Projections
Research of county councils recently further found council budgets being stretched by the increasing figures of children and older individuals requiring Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, 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 reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (IMD) for UK local authorities, several key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the report.
“While only one key city is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The figures highlights the extent of difficulties facing local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the study found.
