Based on a latest study of municipal councils, English councils are planning to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of councils are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling playing fields and land to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would prioritise service redesigns and utilising savings to manage growing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England said its property management strategy featured the sale of a shopping centre in Rainham and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the strategy.
Council Tax Rises and Wider Fiscal Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase local levies next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases 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 improved services and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of regional authorities recently also found local finances being strained 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 increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of challenges confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting funding system 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 essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened care services in the last year, the survey revealed.
