According to a recent survey of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling public land and land to support their finances, but they argue they must proceed to raise vital cash from asset sales 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 distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and utilising savings to weather increasing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in Kent said its property management strategy featured the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase local levies next April to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures take time to deliver both improved services and financial savings,” stated a council leader.
He added: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils recently further found council budgets being strained by the growing number of children and adults requiring Send support.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of challenges confronting municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and demand,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the survey revealed.
