According to a latest survey of local authorities, English councils are planning to offload community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in the UK 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.
Councils have previously come under fire for disposing of public land and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of authorities attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would focus on service redesigns and using financial reserves to weather increasing fiscal pressures.”
Detailed Cases of Proposed Sales
Medway Council in Kent announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Broader Fiscal Strains
This research of local authorities in the key cities group, which includes several urban centers, further found that over seven in ten of councils will need to increase council taxes next spring to cover the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both improved services and cost efficiency,” stated a council leader.
He added: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
Research of county councils this week also found local finances being stretched by the growing number of children and adults needing special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the scale of challenges confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of deprivation and demand,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
