According to a recent study of municipal councils, English councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and land to support their budgets, but they argue they must continue 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 fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and utilising savings to manage growing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its property management strategy included the sale of a shopping centre in Rainham and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will need to increase local levies next April to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to deliver both improved services and financial savings,” stated a council leader.
He added: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils this week also found local finances being stretched by the growing number of young people and adults needing Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the scale of challenges facing municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of deprivation and demand,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey found.
