Based on a latest poll of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported 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.
Local governments have in the past faced criticism for selling playing fields and open spaces to support their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of councils seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and using savings to weather increasing financial challenges.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Fiscal Strains
The survey of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of councils will need to raise local levies next spring to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures require time to deliver both better provisions and financial savings,” stated a council leader.
He added: “We face demographic pressures which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Projections
Research of regional authorities this week further found council budgets being strained by the increasing figures of children and older individuals needing special educational assistance.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The figures highlights the extent of challenges facing municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and need,” said a council leader.
“Without 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 residents.”
One in five of local authorities have cut or compromised care services in the last year, the survey revealed.
