Based on a recent survey of municipal councils, English councils are preparing to sell community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK reported that six out of ten of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of councils attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and utilising savings to manage increasing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in Kent said its property management strategy included the disposal of a retail complex in Rainham and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Increases and Broader Financial Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
Medway council explained it will proceed with property disposals 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 creative strategies but certain measures take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “There are demographic pressures 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 this week also found local finances being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (IMD) for English councils, several key cities members were among the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties facing municipal officials across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the study found.
