Based on a recent survey of municipal councils, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling playing fields and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of authorities seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and utilising savings to manage growing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in Kent announced its asset disposal plan included the sale of a retail complex in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of councils will have to increase local levies next spring to address the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
Research of county councils this week further found council budgets being strained by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (IMD) for English councils, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of England. The figures highlights the scale of difficulties confronting local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey found.
