Based on a new study of local authorities, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of local authorities are intending to dispose of properties to cover 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 contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and using savings 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 Rainham and a community venue in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Strains
This research of councils in the key cities group, which covers several urban centers, further found that more than 70% of authorities will need to increase local levies next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals 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 taking innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “There are demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities this week further found local finances being stretched by the growing number of children and older individuals needing special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the Send system until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures highlights the scale of difficulties confronting local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of deprivation and need,” said a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study found.
