According to a new poll of local authorities, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and land to support their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of authorities attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in southeast England said its property management strategy included the sale of a retail complex in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise council taxes next April to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “There are population challenges 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 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of regional authorities recently further found council budgets being strained by the growing number of children and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (IMD) for English councils, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the extent of challenges confronting local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
