Based on a recent poll of municipal councils, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK stated that six out of ten of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to shore up their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of authorities attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and utilising savings to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in southeast England said its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase local levies next April to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to achieve both improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will persist to increase the strains 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 Forecasts
Research of county councils this week also found local finances being strained by the increasing figures of children and older individuals needing Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most deprived in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” said the report.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of difficulties confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study revealed.
