Based on a new study of local authorities, English councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for 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 social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of councils seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in southeast England announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over five years.
- 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 strategy.
Council Tax Increases and Broader Financial Pressures
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next April to cover the growing cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, 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 Vince Maple.
He added: “There are demographic pressures which will persist to increase 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.”
National Trends and Projections
A survey of county councils recently further found local finances being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges facing municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the study revealed.
