Based on a new study of municipal councils, English councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that six out of ten of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and open spaces to support their finances, 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 raise money from a quick sale of holdings represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to manage increasing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in Kent said its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Rises and Broader Fiscal Strains
This research of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will have to raise local levies next April to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said 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 creative strategies but certain measures take time to achieve both improved services and financial savings,” said a council leader.
He added: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently further found local finances being strained by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off scheduled changes to the Send system until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (IMD) covering UK local authorities, several participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of difficulties facing local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” said Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey found.
