According to a latest survey of local authorities, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of councils are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling public land and land to support their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its property management strategy included the sale of a retail complex in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Increases and Broader Fiscal Pressures
The survey of local authorities in the coalition, which covers several urban centers, also found that over seven in ten of councils will have to increase council taxes next April to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils this week also found council budgets being strained by the increasing figures of children and older individuals needing Send support.
The County Councils Network projected that local shortfalls will reach £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 changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” said the study.
“While 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 extent of difficulties facing local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and need,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to fund, 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.
