According to a new poll of local authorities, English councils are preparing to offload community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of councils are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling playing fields and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of authorities seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising savings to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in southeast England said its asset disposal plan included the sale of a retail complex in Rainham and a social club in another town to raise 20 million pounds over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Council Tax Increases and Wider Fiscal Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise local levies next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals 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 adopting innovative approaches but some of these take time to deliver both better provisions and financial savings,” said a council leader.
He continued: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of county councils recently further found local finances being stretched by the growing number of young people and older individuals needing Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The data highlights the scale of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of councils have reduced or weakened social care provision in the last year, the survey revealed.
