Based on a recent poll of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of local authorities are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and open spaces to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
The group noted that a significant number of councils attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and using savings to weather increasing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in Kent said its asset disposal plan featured the disposal of a retail complex in a local town and a social club in another town to generate £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase council taxes next spring to address the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities recently further found council budgets being stretched by the increasing figures of children and adults requiring Send support.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a policy document setting out those changes has been postponed.
Deprivation and Financial Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” noted the report.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the extent of difficulties confronting municipal officials across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and demand,” said a council leader.
“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.”
A fifth of councils have cut or compromised care services in the last year, the study found.
