Based on a new poll of local authorities, English councils are preparing to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of playing fields and land to shore up their finances, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a significant number of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in Kent said its property management strategy included the disposal of a retail complex in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to raise local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “We face demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils recently further found council budgets being strained by the increasing figures of children and older individuals needing Send support.
A network of councils said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (IMD) covering UK local authorities, many key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“While only one key city is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of difficulties confronting local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and addresses the real levels of deprivation and need,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the last year, the study found.
