Based on a latest survey of municipal councils, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and land to shore up their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of councils seeking to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and using savings to weather increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its asset disposal plan included the sale of a retail complex in Rainham and a community venue in Rochester to generate £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 also be sold under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase council taxes next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
Research of regional authorities this week also found local finances being strained by the growing number of young people and older individuals requiring Send support.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of difficulties facing local leaders across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
