Based on a recent study of local authorities, English councils are preparing to offload social clubs, sports centres, 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 for major urban areas in England stated that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling public land and open spaces to support their finances, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a significant number of authorities seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in southeast England said its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Local Levy Increases and Broader Financial Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise council taxes next April to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will continue to increase the strains 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
A survey of regional authorities this week also found council budgets being strained by the increasing figures of young people and adults requiring special educational assistance.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the study revealed.
