Based on a recent poll of local authorities, English councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and land to support their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of authorities seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in Kent announced its asset disposal plan included the disposal of a shopping centre in a local town and a social club in another town to generate £20m over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
The survey of local authorities in the coalition, which covers several urban centers, also found that more than 70% of authorities will need to increase council taxes next April to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these take time to deliver both better provisions and financial savings,” stated a council leader.
He added: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities this week further found council budgets being strained by the growing number of children and adults needing special educational assistance.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (IMD) covering English councils, several key cities members 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 nationally under the latest IMD measures,” said the report.
“While only one key city is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of challenges facing local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and need,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the survey found.
