According to a new survey of local authorities, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of local authorities are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling public land and open spaces to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a significant number of authorities seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and utilising financial reserves to weather growing financial challenges.”
Specific Cases of Planned Sales
One local authority in southeast England said its property management strategy included the disposal of a retail complex in Rainham and a community venue in Rochester to generate 20 million pounds over five years.
- Gillingham golf club 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 Broader Financial Strains
The survey of councils in the coalition, which covers several urban centers, further found that over seven in ten of authorities will need to raise local levies next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both improved services and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
Research of county councils this week further found council budgets being strained by the increasing figures of young people and adults needing Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (IMD) for UK local authorities, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only a single urban area is among 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 scale of challenges confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised care services in the last year, the survey revealed.
