Based on a recent study of local authorities, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated 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 previously faced criticism for disposing of public land and land to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of councils attempting to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Increases and Wider Fiscal Strains
The survey of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of councils will have to raise local levies next April to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council 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 creative strategies but some of these require time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities recently further found council budgets being strained by the increasing figures of young people and older individuals needing Send support.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (IMD) covering English councils, several participating urban areas were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the scale of difficulties facing municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Without this, local authorities 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 care services in the past 12 months, the survey found.
