According to a recent survey of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of local authorities are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of authorities attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and utilising savings to manage growing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in Kent announced its property management strategy featured the sale of a shopping centre in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the strategy.
Local Levy Increases and Broader Financial Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase council taxes next April to cover the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with property disposals after steep rises 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 certain measures take time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “There are population challenges which will continue to add to the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils recently also found council budgets being strained by the growing number of young people and adults needing Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Deprivation and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the latest deprivation indices,” said the study.
“Although 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 challenges confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and demand,” said a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
