According to a recent study of local authorities, English councils are planning to offload community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils seeking to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to manage increasing fiscal pressures.”
Specific Cases of Planned Sales
Medway Council in Kent said its property management strategy included the sale of a retail complex in a local town and a social club in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Increases and Wider Financial Pressures
This research of councils in the coalition, which includes several urban centers, also found that more than 70% of councils will have to raise council taxes next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils this week also found council budgets being strained by the growing number of young people and older individuals needing special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (IMD) for UK local authorities, many key cities members were among the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the study.
“While only one key city is among the top 10 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 difficulties facing local leaders across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and responds to the actual extent of deprivation and demand,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey found.
