According to a new survey of municipal councils, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in England stated that six out of ten of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to support their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to raise money from a quick sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and using savings to manage increasing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in Kent announced its property management strategy featured the disposal of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the strategy.
Council Tax Rises and Wider Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise council taxes next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council said it will proceed 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 adopting creative strategies but certain measures require time to achieve both improved services and financial savings,” stated Vince Maple.
He continued: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of county councils this week also found council budgets being strained by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the study.
“Although 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 most deprived fifth of England. The data underscores the scale of difficulties confronting local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders 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 Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, 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.
