According to a new study of local authorities, English councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils for major urban areas in England stated that 60% of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of public land and land to shore up their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on restructuring services and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in southeast England announced its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will also be sold under the strategy.
Council Tax Increases and Wider Fiscal Strains
This research of local authorities in the coalition, which covers several urban centers, also found that more than 70% of authorities will have to increase local levies next spring to address the rising cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with asset sales after steep rises in the cost of youth support, 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,” stated a council leader.
He added: “There are population challenges which will persist to increase the strains we have. As a unitary authority, 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 further found local finances being strained by the growing number of young people and adults needing special educational assistance.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (IMD) covering English councils, many key cities members were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The figures highlights the extent of difficulties facing local leaders across key cities in the coming year,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
