Based on a new survey of local authorities, English councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of local authorities are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to shore up their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of authorities seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Rises and Broader Financial Strains
The survey of councils in the coalition, which includes several urban centers, also found that over seven in ten of authorities will have to increase local levies next April to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of regional authorities recently further found council budgets being strained by the growing number of children and adults requiring Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, 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 setting out those reforms has been postponed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (IMD) for UK local authorities, several key cities members were among the most deprived in England.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” noted the study.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The figures highlights the scale of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and need,” said a council leader.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study found.
