Based on a recent study of local authorities, English councils are preparing to offload community centers, athletic facilities, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of public land and open spaces to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of authorities attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in southeast England said its asset disposal plan featured the sale of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Broader Fiscal Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase local levies next April to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both better provisions and financial savings,” stated Vince Maple.
He continued: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Projections
Research of county councils this week also found local finances being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of challenges facing local leaders across key cities in the next twelve months,” the analysis concluded.
“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 demand,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the survey found.
