Based on a new survey of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land to support their budgets, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of councils seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in another town to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Local Levy Increases and Wider Financial Strains
The survey of councils in the coalition, which includes several urban centers, also found that over seven in ten of authorities will need to raise council taxes next April to address the rising cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead 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 deliver both improved services and financial savings,” said a council leader.
He added: “We face population challenges which will persist 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 Forecasts
Research of county councils recently also found council budgets being stretched by the increasing figures of young people and older individuals needing Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of difficulties confronting local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study revealed.
