Based on a latest 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 assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and land to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in southeast England announced its property management strategy included the disposal of a retail complex in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Pressures
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 council taxes next April to address the rising cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to deliver both better provisions and financial savings,” said a council leader.
He continued: “There are demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities this week further found local finances being stretched by the growing number of young people and older individuals requiring special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the most recent indices of deprivation (IMD) covering UK local authorities, many participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” said the report.
“While only one key city is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of challenges facing municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and need,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the survey found.
