According to a latest study of local authorities, English councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and open spaces to support their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and utilising savings to weather growing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to raise 20 million pounds over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase council taxes next April to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both improved services and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
A survey of county councils recently further found council budgets being strained by the growing number of young people and older individuals needing Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” said the report.
“While only one key city is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of challenges confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey revealed.
