Based on a recent survey of local authorities, English councils are planning to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously come under fire for selling public land and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on restructuring services and utilising savings to weather increasing financial challenges.”
Detailed Cases of Proposed Sales
One local authority in Kent announced its property management strategy included the disposal of a retail complex in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Increases and Broader Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase local levies next April to cover the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures take time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “There are population challenges which will persist to increase the pressures we have. As a local government body, 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 county councils this week further found council budgets being strained by the growing number of children and adults needing special educational assistance.
A network of councils said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (IMD) for English councils, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of challenges facing local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey found.
