According to a new poll of local authorities, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of authorities attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and utilising savings to manage growing fiscal pressures.”
Specific Examples of Proposed Sales
Medway Council in Kent said its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Pressures
This research of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of authorities will need to increase council taxes next spring to address the rising cost of essential services, increased rates of homelessness, and a persistent housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils this week also found council budgets being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (IMD) for UK local authorities, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The data highlights the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and demand,” stated a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
