According to a latest poll of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of local authorities are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of public land and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and using savings to manage growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase council taxes next April to address the growing cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils recently further found council budgets being strained by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (IMD) for UK local authorities, several participating urban areas were among the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The data highlights the extent of difficulties facing local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
