Based on a new survey of local authorities, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of public land and land to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of councils attempting to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in southeast England said its asset disposal plan included the sale of a retail complex in a local town and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Wider 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 authorities will need to raise local levies next April to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will proceed 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 adopting creative strategies but certain measures require time to deliver both improved services and cost efficiency,” 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 drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of regional authorities this week further found council budgets being strained by the increasing figures of children and adults needing special educational assistance.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (IMD) covering UK local authorities, many participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study found.
