According to a latest poll of municipal councils, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that 60% of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land 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 high proportion of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and using financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its asset disposal plan included the sale of a retail complex in a local town and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Pressures
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 address the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both improved services and financial savings,” stated Vince Maple.
He continued: “We face population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of regional authorities this week also found council budgets being stretched by the increasing figures of children and older individuals requiring special educational assistance.
A network of councils said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Government officials have put off scheduled changes to the Send system until next year after a white paper outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (IMD) covering UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of difficulties facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and need,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the study found.
