According to a latest study of municipal councils, English councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling public land and land to shore up their finances, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and using savings to manage growing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in Kent said its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Increases and Wider Financial Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise local levies next spring to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures 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 county councils this week also found council budgets being strained by the increasing figures of children and adults requiring special educational assistance.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of England. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and need,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
