According to a new survey of local authorities, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten 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 contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”
Specific Cases of Planned Sales
One local authority in Kent announced its property management strategy featured the sale of a shopping centre in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to increase local levies next spring to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures require time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils this week also found local finances being strained by the increasing figures of young people and older individuals requiring 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 grapple to manage rising needs.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (IMD) for English councils, many key cities members were among the most disadvantaged in England.
- “Participating urban centers 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 a single urban area is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The figures underscores the extent of difficulties confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and need,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
