Based on a recent poll of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling public land and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a significant number of councils attempting to generate funds from a quick sale of holdings marked “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 weather increasing fiscal pressures.”
Detailed Examples of Proposed Sales
Medway Council in southeast England announced its property management strategy featured the sale of a retail complex in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Broader Financial Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, and a persistent 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 short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will continue to increase 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 Patterns and Forecasts
Research of county councils this week further found local finances being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (IMD) covering UK local authorities, several key cities members were among the most deprived in England.
- “Member cities like several major towns rank 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 disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the extent of difficulties confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
