According to a recent poll of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and open spaces to support their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of councils seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and using financial reserves to weather increasing financial challenges.”
Specific Examples of Planned Sales
Medway Council in southeast England said its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Increases and Broader Fiscal Pressures
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will have to raise local levies next April to cover the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both improved services and financial savings,” stated a council leader.
He added: “We face demographic pressures which will continue 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.”
National Patterns and Forecasts
A survey of county councils this week also found council budgets being stretched by the increasing figures of young people and adults needing special educational assistance.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (IMD) covering UK local authorities, several key cities members were among the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The data underscores the extent of challenges confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and demand,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the study found.
