According to a latest poll of municipal councils, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and land to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a high proportion of authorities attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using financial reserves to weather growing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in Kent said its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Pressures
This research of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of authorities will need to raise council taxes next April to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“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 demographic pressures which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Trends and Projections
A survey of regional authorities recently further found local finances being stretched by the growing number of children and adults needing special educational assistance.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off scheduled changes to the Send system until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several 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 across the country under the latest deprivation indices,” noted the study.
“While only one key city is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of England. The figures underscores the scale of difficulties confronting local leaders across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey revealed.
