According to a latest study of local authorities, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of public land and land to support their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of councils attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and utilising financial reserves to manage increasing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Rises and Wider Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase council taxes next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “There are demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
Research of county councils this week further found council budgets being stretched by the growing number of children and adults needing Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (IMD) covering UK local authorities, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of challenges confronting municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and need,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the study revealed.
