Based on a recent poll of local authorities, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and land to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and utilising savings to weather increasing fiscal pressures.”
Specific Examples of Proposed Sales
Medway Council in Kent said its property management strategy featured the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Local Levy Rises and Broader Fiscal Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise local levies next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both improved services and financial savings,” stated Vince Maple.
He continued: “We face demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
A survey of county councils this week further found local finances being strained by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (IMD) for English councils, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of England. The data underscores the scale of challenges facing local leaders across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey revealed.
