According to a new poll of municipal councils, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and land to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of councils attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and using savings to manage increasing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in Kent announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Council Tax Increases and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next spring to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
Research of county councils this week also found local finances being strained by the growing number of children and older individuals needing special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (IMD) for UK local authorities, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and need,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study found.
