According to a latest study of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in England reported that 60% of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling playing fields and land to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in southeast England said its property management strategy featured the sale of a shopping centre in Rainham and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Financial Strains
The survey of councils in the coalition, which includes several urban centers, also found that more than 70% of authorities will have to raise council taxes next April to address the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of county councils this week also found council budgets being stretched by the growing number of children and adults needing Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“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 worst-off 20% of England. The data underscores the extent of difficulties facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of deprivation and demand,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the survey revealed.
