According to a recent survey of municipal councils, English councils are planning to offload community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of local authorities are intending 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 playing fields and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and using financial reserves to weather growing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in southeast England announced its asset disposal plan featured the sale of a retail complex in Rainham and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the plan.
Local Levy Rises and Wider Financial Pressures
This research of local authorities in the coalition, which includes several urban centers, further found that more than 70% of authorities will have to raise council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will proceed with property disposals after sharp increases in the cost of youth support, 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 achieve both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures 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 very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities this week further found council budgets being strained by the increasing figures of children and adults needing special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the report added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey revealed.
