Based on a new poll of local authorities, English councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling public land and land to support their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a significant number of councils seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would focus on restructuring services and using financial reserves to weather increasing fiscal pressures.”
Specific Cases of Planned Disposals
One local authority in southeast England said its asset disposal plan featured the sale of a retail complex in a local town and a community venue in another town to raise £20m over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Rises and Wider Financial Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and cost efficiency,” stated 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 over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils this week further found local finances being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the scale of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the study revealed.
