Based on a new study of municipal councils, English councils are preparing to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of councils are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of playing fields and land to support their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and using financial reserves to weather growing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in Kent said its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to raise 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Pressures
The survey of councils in the key cities group, which includes several urban centers, further found that more than 70% of authorities will have to increase local levies next April to cover the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Projections
A survey of county councils this week also found council budgets being strained by the increasing figures of children and older individuals needing Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the extent of difficulties facing municipal officials across key cities in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey found.
