According to a recent study of local authorities, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of playing fields and land to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of councils seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and using savings to manage increasing fiscal pressures.”
Detailed Cases of Planned Sales
Medway Council in Kent said its asset disposal plan included the sale of a retail complex in a local town and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Rises and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers several urban centers, further found that more than 70% of authorities will need 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 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 certain measures take time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities this week also found council budgets being stretched by the growing number of children and older individuals requiring Send support.
A network of councils said 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 planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The figures highlights the extent of difficulties facing local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and need,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
