According to a new survey of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and land to support their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to raise money from a fire 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 savings to weather increasing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Rises and Broader Financial Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise local levies next April to cover the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Projections
Research of county councils this week also found council budgets being stretched by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper outlining those changes has been postponed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The data underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
