According to a latest study of local authorities, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England reported that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of public land and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and using savings to manage increasing fiscal pressures.”
Detailed Cases of Planned Disposals
One local authority in Kent announced its asset disposal plan included the sale of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Rises and Broader Financial Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to increase local levies next spring to cover the growing cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils this week also found local finances being stretched by the increasing figures of young people and adults requiring special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those changes has been postponed.
Deprivation and Financial Shortfalls
According to the most recent deprivation measures (IMD) covering English councils, several participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the study revealed.
