Based on a recent survey of local authorities, English councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and land to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of authorities 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 restructuring services and utilising financial reserves to manage increasing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its property management strategy included the disposal of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Wider Fiscal Pressures
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 address the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council said it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both improved services and financial savings,” said Vince Maple.
He added: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
Research of county councils this week also found local finances being stretched by the growing number of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” said the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of challenges facing local leaders across major urban centers in the coming year,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the last year, the study revealed.
