Based on a recent poll of local authorities, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and open spaces to support their finances, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition said that a significant number of authorities attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and using savings to manage increasing financial challenges.”
Specific Examples of Planned Disposals
One local authority in Kent said its property management strategy included the sale of a retail complex in a local town and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Strains
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase local levies next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils this week also found council budgets being strained by the increasing figures of children and older individuals requiring special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (IMD) for UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The figures underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the past 12 months, the study revealed.
