According to a recent poll of local authorities, English councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England reported that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of councils seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and using financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its asset disposal plan included the disposal of a retail complex in Rainham and a social club in another town to raise 20 million pounds over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Wider Fiscal Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase council taxes next spring to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both better provisions and financial savings,” stated a council leader.
He added: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Forecasts
Research of regional authorities this week also found council budgets being stretched by the increasing figures of children and adults requiring Send support.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (IMD) covering English councils, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and need,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices 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 study revealed.
