Based on a recent study of municipal councils, English councils are preparing to sell community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that six out of ten of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to shore up their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of councils attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise service redesigns and using savings to manage increasing fiscal pressures.”
Detailed Cases of Proposed Sales
One local authority in southeast England said its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Broader Financial Pressures
This research of local authorities in the coalition, which includes several urban centers, further found that more than 70% of authorities will have to increase local levies next April to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of regional authorities this week further found local finances being strained by the increasing figures of children and adults needing special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures highlights the scale of difficulties confronting local leaders across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and demand,” stated a council leader.
“Lacking this, councils will persist to face impossible choices 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 social care provision in the last year, the survey found.
