According to a new survey of municipal councils, English councils are planning to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK reported that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of public land and land to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage growing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Rises and Broader Financial Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase council taxes next April to address the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority 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 creative strategies but certain measures take time to deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils recently also found council budgets being strained by the growing number of young people and adults requiring Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (IMD) covering UK local authorities, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of challenges facing municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey found.
