Based on a recent study of municipal councils, English councils are preparing to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
A coalition of councils 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.
Councils have previously faced criticism for selling playing fields and land to support their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and using savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase council taxes next April to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of county councils this week further found local finances being stretched by the increasing figures of children and adults requiring Send support.
A network of councils said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in 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 deprivation indices,” noted the study.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
