Based on a latest survey of municipal councils, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of councils are planning to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of playing fields and land to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders 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 featured the disposal of a shopping centre in a local town and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will additionally be sold under the strategy.
Council Tax Rises and Wider Fiscal Pressures
This research of councils in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will have to increase council taxes next April to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to achieve both better provisions and financial savings,” said a council leader.
He added: “We face population challenges which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of county councils this week also found local finances being strained by the growing number of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, cities 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 key cities in the coming year,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and demand,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
