Based on a new study of municipal councils, 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.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England reported that 60% of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or face insolvency.
This coalition noted that a significant number of authorities attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and using savings to weather increasing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in Kent announced its property management strategy included the disposal of a retail complex in Rainham and a community venue in Rochester to generate £20m 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 sold under the strategy.
Local Levy Increases and Wider Fiscal Pressures
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase local levies next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “There are demographic pressures which will persist 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 extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities recently also found council budgets being stretched by the increasing figures of children and adults needing Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” said the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties facing local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
