According to a new survey of local authorities, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and land to shore up their finances, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
The group said that a significant number of councils attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and using savings to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in southeast England announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Wider Financial Pressures
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to raise council taxes next spring to address the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both improved services and financial savings,” stated a council leader.
He added: “We face demographic pressures which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of regional authorities this week also found council budgets being strained by the growing number of children and adults requiring special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Gaps
Based on the latest deprivation measures (IMD) for UK local authorities, many key cities members were included in the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The figures underscores the scale of challenges confronting local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the survey revealed.
