According to a new poll of local authorities, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of local authorities are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and land to support their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of councils seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to weather increasing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in southeast England said its asset disposal plan included the sale of a retail complex in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Broader Financial Pressures
This research of councils in the key cities group, which includes several urban centers, also found that over seven in ten of councils 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 proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities recently further found local finances being stretched by the growing number of young people and older individuals needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the survey found.
