According to a recent survey of municipal councils, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and land to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and using savings to manage growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its property management strategy included the sale of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which covers several urban centers, further found that more than 70% of authorities will need to raise council taxes next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both better provisions and financial savings,” stated a council leader.
He added: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Trends and Projections
Research of regional authorities recently also found local finances being stretched by the growing number of children and adults requiring Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) for UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of difficulties facing local leaders across key cities in the next twelve months,” the analysis 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 deprivation and need,” stated Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the study found.
