According to a latest survey of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and land to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and utilising financial reserves to manage growing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in southeast England announced its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the strategy.
Council Tax Rises and Broader Financial Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise council taxes next April to address the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures take time to deliver both improved services and financial savings,” stated a council leader.
He continued: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities recently also found local finances being strained by the increasing figures of children and adults needing Send support.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the Send system until next year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The figures underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the survey found.
