According to a new poll of municipal councils, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of local authorities are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of authorities attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and utilising financial reserves to manage growing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in Kent said its property management strategy included the sale of a shopping centre in Rainham and a community venue in another town to raise £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 additionally be sold under the plan.
Council Tax Rises and Wider Financial Pressures
This research of councils in the coalition, which covers several urban centers, further found that over seven in ten of authorities will have to increase local levies next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of regional authorities this week also found local finances being strained by the increasing figures of children and older individuals requiring special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although 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 data underscores the extent of challenges confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and demand,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the survey found.
