Based on a new survey of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and open spaces to support their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of councils attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on service redesigns and using savings to weather increasing financial challenges.”
Specific Cases of Proposed Disposals
One local authority in Kent said its property management strategy featured the sale of a shopping centre in Rainham and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Broader Fiscal Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “We face demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Patterns and Forecasts
A survey of regional authorities this week further found council budgets being stretched by the growing number of children and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the top 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the extent of difficulties facing local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the survey found.
