Based on a new poll of municipal councils, English councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would prioritise service redesigns and using savings to weather growing fiscal pressures.”
Detailed Cases of Proposed Sales
Medway Council in Kent said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Increases and Wider Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of councils will have to increase council taxes next spring to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will continue to increase the pressures 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 Patterns and Projections
A survey of county councils this week also found local finances being stretched by the growing number of young people and older individuals needing Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and need,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study revealed.
