According to a recent survey of local authorities, English councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling public land and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and using savings to manage increasing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England said its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Increases and Wider Financial Pressures
This research of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of councils will need to raise council taxes next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these take time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of regional authorities recently further found local finances being stretched by the increasing figures of young people and adults requiring Send support.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) for UK local authorities, several participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The data underscores the scale of challenges confronting municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey found.
