Based on a new survey of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that 60% of local authorities are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and utilising savings to weather growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a retail complex in a local town and a community venue in another town to raise £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Strains
The survey of councils in the key cities group, which covers several urban centers, also found that over seven in ten of councils will have to raise local levies next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales 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 certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities this week further found local finances being stretched by the growing number of young people and older individuals requiring special educational assistance.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (IMD) for UK local authorities, several key cities members were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and demand,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study found.
