Based on a latest study of local authorities, English councils are planning to offload community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of authorities seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and using financial reserves to manage growing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in Kent said its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will also be sold under the strategy.
Council Tax Increases and Wider Financial Pressures
The survey of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will need to raise council taxes next April to cover the rising cost of essential services, increased rates of homelessness, and a persistent 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 short-term housing.
“We are adopting creative strategies but some of these require time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of regional authorities recently also found local finances being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network said 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 scheduled changes to the Send system until the coming year after a white paper outlining those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (IMD) for English councils, many participating urban areas were among the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the scale of challenges facing municipal officials across key cities in the coming year,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the survey found.
