Based on a recent study of local authorities, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and open spaces to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and using savings to weather increasing financial challenges.”
Detailed Cases of Proposed Sales
Medway Council in Kent said its asset disposal plan included the sale of a shopping centre in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Rises and Wider Fiscal Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase local levies next April to cover the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both improved services and financial savings,” said a council leader.
He continued: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Projections
Research of county councils this week further found council budgets being strained by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (IMD) covering English councils, several key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The figures underscores the scale of difficulties confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
