According to a recent survey of local authorities, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to cover 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 land to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and using financial reserves to weather growing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in southeast England said its property management strategy included the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Council Tax Rises and Wider Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these require time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of regional authorities recently further found local finances being strained by the growing number of young people and adults needing Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study revealed.
