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According to a latest survey of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.

Increasing Fiscal Pressures Prompt Asset Sales

The Key Cities Group representing major urban areas in the UK stated that 60% of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.

Local governments have previously come under fire for disposing of public land and land to shore up their budgets, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.

This coalition said that a significant number of councils seeking to raise money from a quick 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 utilising financial reserves to weather increasing financial challenges.”

Detailed Examples of Proposed Disposals

Medway Council in Kent announced its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in Rochester to raise 20 million pounds over five years.

• Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the plan.

Council Tax Rises and Wider Fiscal Pressures

The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase local levies next spring to cover the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.

The authority explained it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.

“We are adopting creative strategies but certain measures take time to achieve both better provisions and financial savings,” stated a council leader.

He added: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”

National Patterns and Forecasts

Research of regional authorities recently also found council budgets being strained by the increasing figures of young people and older individuals needing Send support.

The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.

Government officials have delayed planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.

Deprivation and Funding Shortfalls

Based on the latest indices of deprivation (IMD) for English councils, several participating urban areas were among the most deprived in the country.

• “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the study.

“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of challenges confronting local leaders across major urban centers in the coming year,” the analysis added.

“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.

“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”

One in five of local authorities have cut or compromised care services in the last year, the study found.