Based on a new poll of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and land to shore up their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group said that a significant number of councils seeking to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and utilising savings to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will also be sold under the plan.
Local Levy Increases and Broader Fiscal Strains
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise local levies next April to cover the growing cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these take time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils this week also found local finances being strained by the growing number of children and adults needing special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The data underscores the extent of challenges confronting local leaders across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and demand,” stated a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey found.
