According to a recent survey of municipal councils, English councils are preparing to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK reported that six out of ten of local authorities are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of public land and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of councils seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and utilising savings to weather growing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent said its property management strategy featured the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the plan.
Council Tax Rises and Wider Financial Pressures
This research of local authorities in the coalition, which includes several urban centers, also found that more than 70% of authorities will have to raise local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding 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, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Forecasts
A survey of county councils recently further found council budgets being stretched by the increasing figures of young people and older individuals requiring Send support.
A network of councils said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the top 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 England. The data highlights the scale of difficulties facing local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the last year, the survey found.
