Based on a latest survey of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and open spaces to support their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using financial reserves to manage growing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in Kent announced its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will also be sold under the strategy.
Council Tax Increases and Wider Financial Pressures
The survey of local authorities in the coalition, which covers several urban centers, also found that over seven in ten of councils will have to increase council taxes next spring to cover the growing cost of essential services, higher levels of housing insecurity, and a persistent 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 adopting creative strategies but certain measures require time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “We face population challenges which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Trends and Projections
Research of county councils recently also found local finances being stretched by the growing number of young people and adults requiring special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of deprivation and demand,” stated a council leader.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the survey found.
