According to a recent study of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
The group said that a high proportion of councils seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to weather increasing financial challenges.”
Specific Cases of Proposed Sales
Medway Council in Kent announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Wider Fiscal Pressures
This research of councils in the coalition, which includes several urban centers, further found that over seven in ten of councils will have to increase council taxes next April to address the growing cost of essential services, increased rates of homelessness, and a persistent housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these require time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will continue to add to the strains 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.”
National Patterns and Projections
A survey of county councils this week also found council budgets being stretched by the growing number of children and older individuals needing special educational assistance.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The data highlights the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“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 disadvantage and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the study revealed.