According to a new survey of local authorities, English councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and land to support their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities seeking to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and using savings to manage growing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in Kent announced its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Rises and Wider Financial Strains
The survey of local authorities in the coalition, which covers several urban centers, further 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 accommodation deficit.
The authority explained 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 innovative approaches but some of these take time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities recently further found local finances being stretched by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (IMD) covering English councils, many key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The data highlights the scale of difficulties facing municipal officials across key cities in the coming year,” the analysis concluded.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study found.
