Based on a new poll of local authorities, English councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that six out of ten of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and open spaces to support their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and using savings to manage increasing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in southeast England said its property management strategy included the sale of a shopping centre in Rainham and a social club in another town to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Increases and Broader Fiscal Pressures
This research of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will need to raise council taxes next April to address the rising cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “We face population challenges which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
Research of regional authorities recently further found council budgets being strained by the increasing figures of young people and adults needing special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
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.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (IMD) for UK local authorities, many key cities members were included in the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of difficulties confronting local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened care services in the last year, the study revealed.
