Based on a recent study of local authorities, English councils are planning to offload community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and land to support their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in Kent announced its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Increases and Broader Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, further found that more than 70% of authorities will have to increase council taxes next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of county councils this week further found local finances being strained by the increasing figures of children and adults needing special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The figures highlights the extent of difficulties facing municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study found.
