Based on a new survey of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and land to support their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of authorities seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise service redesigns and utilising savings to manage growing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan included 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 commercial properties owned in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Increases and Wider Financial Strains
The survey of councils in the coalition, which covers several urban centers, further found that over seven in ten of councils will need to raise council taxes next spring to cover the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained 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 take time to deliver both improved services and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
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.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (IMD) for English councils, many key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The figures highlights the extent of difficulties facing municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
