According to a recent survey of municipal councils, English councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of public land and open spaces to shore up their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Detailed Cases of Proposed Sales
Medway Council in Kent said its property management strategy featured the disposal of a shopping centre in a local town and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Local Levy Increases and Broader Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will have to increase local levies next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will press ahead with asset sales 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 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 pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of regional authorities this week further found council budgets being strained by the growing number of children and adults requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, several key cities members were among the most deprived in England.
- “Member cities like several major towns place in the top 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of challenges confronting local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
