Based on a recent study of local authorities, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in the UK stated that 60% of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling public land and land to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
This coalition said that a significant number of councils attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in Kent announced 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.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Rises and Broader Financial Strains
The survey of local authorities in the coalition, which includes several urban centers, further found that more than 70% of councils will need to raise council taxes next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to deliver both better provisions and financial savings,” stated a council leader.
He added: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils recently further found local finances being strained 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 increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (IMD) covering UK local authorities, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the scale of challenges confronting local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study revealed.
