Based on a new survey of local authorities, English councils are preparing to offload community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and open spaces to support their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils seeking to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Proposed Sales
One local authority in Kent announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Local Levy Rises and Wider Fiscal Pressures
This research of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of authorities will need to increase council taxes next spring to cover the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
Research of regional authorities recently further found local finances being strained by the increasing figures of children and older individuals needing Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until next year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (IMD) for English councils, many key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The figures underscores the extent of difficulties confronting local leaders across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the survey revealed.
