According to a latest survey of municipal councils, English councils are planning to offload community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in England 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 come under fire for selling playing fields and land to support their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and using savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Rises and Wider Fiscal Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next spring to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils this week also found local finances being strained by the growing number of young people and older individuals requiring special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of England. The data highlights the extent of difficulties facing local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the study found.
