According to a recent survey of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of public land and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in southeast England announced its property management strategy included the sale of a shopping centre in a local town and a social club in Rochester to generate 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise local levies next April to address the growing cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
Research of regional authorities this week also found local finances being stretched by the increasing figures of children and older individuals needing Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) covering UK local authorities, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers 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 one key city is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The data highlights the scale of challenges facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials 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,” said Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
