Based on a recent study of local authorities, English councils are preparing to offload community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of councils attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in southeast England said its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Increases and Broader Financial Pressures
This research of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will need to increase local levies next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both better provisions and financial savings,” stated Vince Maple.
He added: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of county councils recently also found local finances being strained by the increasing figures of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of difficulties facing municipal officials across key cities in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and demand,” said a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey found.
