According to a latest study of municipal councils, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England 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 previously come under fire for disposing of public land and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils seeking to raise money from a fire sale of holdings marked “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and utilising savings to weather increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its property management strategy featured the disposal of a retail complex in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Rises and Wider Financial Strains
The survey of local authorities in the coalition, which covers several urban centers, also found that more than 70% of councils will have to raise local levies next April to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council explained 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 temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
Research of county councils recently also found council budgets being stretched by the growing number of young people and adults needing Send support.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is in the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study revealed.
