Based on a recent poll of local authorities, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using savings to manage increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in Kent said its property management strategy included the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Financial Strains
This research of councils in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to raise council taxes next April to address the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council said it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “We face population challenges which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities recently further found local finances being stretched by the increasing figures of young people and adults requiring special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes has been postponed.
Deprivation and Financial Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are far more likely 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 analysis concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
