Based on a latest survey of local authorities, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and land to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of councils seeking to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in Kent said its property management strategy featured the sale of a retail complex in Rainham and a social club in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Broader Financial Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently further found local finances being stretched by the growing number of children and adults requiring Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (IMD) for UK local authorities, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of challenges confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and demand,” said a council leader.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
