Based on a new survey of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they rely on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of public land and open spaces to shore up their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of authorities seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Specific Cases of Proposed Sales
One local authority in southeast England announced its property management strategy featured 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 commercial properties held in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Council Tax Rises and Broader Financial Strains
The survey of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of councils will need to increase local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
A survey of county councils recently also found local finances being strained by the increasing figures of children and older individuals requiring special educational assistance.
A network of councils said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (IMD) for English councils, many participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the scale of difficulties facing local leaders across key cities in the next twelve months,” the report added.
“Council officials have been clear 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 vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the survey found.
