Based on a recent study of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils seeking to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to manage increasing financial challenges.”
Detailed Cases of Planned Sales
One local authority in southeast England announced its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Increases and Broader Financial Strains
The survey of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of authorities will have to increase council taxes next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these require time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities this week also found local finances being strained by the increasing figures of children and adults requiring special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of difficulties facing local leaders across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened care services in the last year, the survey revealed.
