According to a recent survey of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for selling public land and land to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
The group said that a significant number of councils attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and utilising savings to weather growing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent announced its property management strategy featured the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for Medway council, will also be sold under the plan.
Council Tax Rises and Broader Fiscal Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise council taxes next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with property disposals 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 taking creative strategies but some of these require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of regional authorities this week also found council budgets being strained by the increasing figures of children and older individuals needing Send support.
A network of councils said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off scheduled changes to the Send system until next year after a policy document outlining those changes has been postponed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The data highlights the extent of difficulties facing municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and need,” stated a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study found.
