According to a recent poll of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of local authorities are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for selling public land and land to support their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on restructuring services and utilising savings to weather growing fiscal pressures.”
Detailed Cases of Planned Disposals
One local authority in southeast England announced its property management strategy featured the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Increases and Wider Financial Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise council taxes next spring to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of regional authorities recently further found local finances being stretched by the growing number of young people and older individuals needing Send support.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (IMD) for UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of challenges facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the last year, the survey revealed.