Based on a recent survey of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of councils attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to weather increasing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in southeast England said its property management strategy featured the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Council Tax Increases and Wider Financial Strains
The survey of local authorities in the coalition, which covers several urban centers, also found that more than 70% of councils will have to increase local levies next spring to address the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these require time to achieve both better provisions and financial savings,” stated a council leader.
He added: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils this week further found local finances being stretched by the increasing figures of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the extent of challenges facing municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
