Based on a recent study of municipal councils, English councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and land to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of councils seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in southeast England said its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Increases and Broader Financial Pressures
The survey of local authorities in the coalition, which includes several urban centers, further found that more than 70% of authorities will have to raise council taxes next April to address the rising cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
Research of regional authorities recently also found local finances being strained by the increasing figures of young people and adults requiring Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have put off scheduled changes to the Send system until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of England. The figures underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
