Based on a recent poll of municipal councils, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and using savings to weather increasing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in southeast England announced its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Rises and Wider Fiscal Strains
The survey of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of councils will have to increase local levies next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases 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 take time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “We face 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 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 young people and older individuals needing special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) covering English councils, many key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of difficulties facing municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of deprivation and need,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study found.
