Based on a latest poll of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and land to support their finances, but they contend they must continue to raise vital cash from property disposals or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would focus on service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in Kent announced its property management strategy included the disposal of a retail complex in a local town and a community venue in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Increases and Broader Fiscal Strains
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase council taxes next April to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will continue to increase 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 very challenging.”
National Patterns and Forecasts
A survey of regional authorities this week further found local finances being stretched by the increasing figures of young people and adults needing Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Gaps
According to the latest deprivation measures (IMD) for UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the last year, the survey found.
