Based on a latest survey of municipal councils, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and land to shore up their budgets, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a significant number of councils seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and utilising savings to manage growing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in southeast England said its asset disposal plan included the sale of a shopping centre in a local town and a community venue in Rochester to generate 20 million pounds over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will also be sold under the strategy.
Council Tax Rises and Wider Fiscal Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities this week further found local finances being strained by the increasing figures of children and older individuals needing Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper outlining those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the extent of difficulties confronting municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the survey found.
