According to a recent poll of local authorities, English councils are preparing to offload community centers, athletic facilities, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling public land and open spaces to support their budgets, but they argue they must proceed 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 holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Specific Cases of Planned Disposals
One local authority in southeast England said its property management strategy featured the sale of a shopping centre in a local town and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Increases and Broader Financial Pressures
The survey of local authorities in the coalition, which includes several urban centers, also found that more than 70% of authorities will need to increase local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and financial savings,” stated Vince Maple.
He continued: “We face population challenges which will persist to increase 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 extremely difficult.”
National Patterns and Forecasts
Research of county councils recently further found council budgets being strained by the growing number of young people and older individuals requiring Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of challenges confronting local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the study revealed.
