According to a recent poll of municipal councils, English councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling public land and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and utilising financial reserves to manage growing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in Kent said its property management strategy included the sale of a retail complex in Rainham and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Broader Financial Pressures
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase council taxes next April to cover the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
Medway council said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils recently also found local finances being stretched by the growing number of young people and adults needing special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those reforms was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of difficulties confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study revealed.
