Based on a latest study of local authorities, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that six out of ten of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling public land and open spaces to support their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan included the sale of a retail complex in Rainham and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Wider Financial Strains
This research of local authorities in the coalition, which includes several urban centers, also found that over seven in ten of authorities will have to raise local levies next April to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He added: “There are demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils this week also found local finances being stretched by the growing number of children and adults requiring Send support.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (IMD) for English councils, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised care services in the last year, the survey found.
