Southampton City Council set to sell car parks and offices

The authority is currently evaluating all of its assets as it prepares to sell off buildings to plug a £39.3m black hole for 2024/25.  It still needs to save £7.7m this year.

The council is awaiting approval from Government for Exceptional Financial Support that would allow it to sell off capital assets to pay for its running costs.

Under usual circumstances, authorities are not allowed to use capital funding to maintain their ongoing revenue costs such as services and utilities. 

READ MORE: Southampton council still needs to save £7.7m this year

But if the one-off support is approved, the authority would be permitted to begin selling property and would be allowed to take on loans.

Council leader Lorna Fielker said work has taken place to list every asset the authority and work out their value.

Budget papers reveal the council wants to make at least £15m a year in selling assets for the next three years.

'Firesale would be absolutely inappropriate'

Cllr Fielker said: "There could be some pieces of land that are not used in a way that’s strategically sound for the council and actually it might make sense to sell those and get a capital receipt in.

"When we’re looking to dispose, we’re looking to dispose of things in a way that makes sense for the residents.

"It’s really important that we don’t just go into a firesale that would be absolutely inappropriate.

"We want to protect bits of the city that are going to bring us income in the future."

Included in the council's portfolio are car parks, office buildings, leisure centres and libraries. 

Southampton City Council

The council also owns an office building outside Southampton. Cllr Fielker ruled out selling off open spaces and parks.

Cllr Fielker said the council would issue a Section 114 notice - effective bankruptcy - if the Government does not give support. 

Exceptional Financial Support is a one-off measure and the authority would be expected to produce a balanced budget in future years.

Cllr Fielker said the support "gives us the time to put in place transformation plans and programmes so that from the following year we’ll be able to set balanced budgets year on year".

The plans come as the council has made savings of £28.9m this year to reduce its overspend down to £7.6m for 2023/24, which can be covered by reserves.

The council is currently looking at a £278.5m spend next year but the authority can only afford £239.2m - leaving it with a £39.3m shortfall.

Council tax will also be increased for next year by 4.99 per cent which is expected to generate a further £5.7m. 

This cannot be increased any further without a public referendum. 

'Our residents shouldn’t be penalised any further'

Cllr Fielker added: "Our residents shouldn’t be penalised any further for things that are beyond their control.

"We have worked really hard throughout the course of this year to look at what it is we’re doing as a local authority and what savings can be delivered.

"The hardest bit for us, our main challenge, is around home school transport costs. This is something that is facing the majority of local authorities."

She added that higher costs for looked-after children and adult care packages have "been driven by an increase in demand and an increased cost".

She said: "One of the ways we’re looking to address that is bringing provision in house so we’re looking to have our own residential care homes for children."

But the opposition group on the council has hit out at the Labour administration.

'The brink of bankruptcy'

Leader of the Conservatives, Cllr Daniel Fitzhenry said: “Labour have taken the council to the brink of bankruptcy, now needing a £40m and bailout from Government to balance the books.

"Council tax is up 4.99 per cent, council housing rents up 7.7 per cent, parking charges, Itchen Bridge toll fees and care charges have all been increased as well, and there are 10s of millions worth of cuts to come to balance the budget for the coming years.

"Labour are destroying our city from shutting roads, causing traffic chaos, from not collecting bins, causing rubbish to pile up and from taxing businesses and residents endlessly to pay for their mess.

"In only 20 months since they have been back running the council Labour are destroying our great city.”