Based on a recent poll of local authorities, English councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and land to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using savings to weather growing financial challenges.”
Specific Cases of Planned Disposals
Medway Council in Kent announced its property management strategy featured the disposal 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 two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Wider Financial Pressures
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of councils will have to raise council taxes next April to address the rising cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, 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 improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils this week further found council budgets being stretched by the growing number of children and adults requiring Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (IMD) for English councils, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the scale of challenges facing local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the survey found.
