Based on a recent survey of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and open spaces to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a significant number of authorities attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and using savings to manage growing fiscal pressures.”
Detailed Cases of Planned Sales
Medway Council in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Rises and Wider Financial Strains
The survey of councils in the coalition, which includes several urban centers, further found that more than 70% of councils will need to raise local levies next spring to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both better provisions and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils this week further found council budgets being strained by the increasing figures of young people and adults needing Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of challenges facing municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
