According to a recent study of municipal councils, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and land to support their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and using financial reserves to manage growing financial challenges.”
Specific Cases of Planned Sales
Medway Council in Kent announced its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to raise 20 million pounds over five years.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Broader Financial Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase local levies next April to cover the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of regional authorities this week also found council budgets being strained by the increasing figures of young people and adults needing Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the Send system until next year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the scale of challenges confronting local leaders across key cities in the coming year,” the report added.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
