Based on a latest poll of local authorities, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to shore up their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
The group noted that a high proportion of authorities attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders stated they would prioritise restructuring services and using financial reserves to weather growing financial challenges.”
Specific Cases of Proposed Sales
Medway Council in southeast England said its asset disposal plan included the sale of a shopping centre in a local town and a social club 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 also be sold under the strategy.
Council Tax Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which includes several urban centers, also found that more than 70% of councils will need to increase local levies next April to cover the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority said it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both improved services and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities recently further found council budgets being strained by the growing number of young people and adults needing Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (IMD) for English councils, several key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of challenges facing local leaders across key cities in the coming year,” the report added.
“Council officials have been explicit about the necessity 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 persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study revealed.
