According to a recent survey of municipal councils, English councils are planning to offload community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and land to shore up their budgets, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils seeking to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using financial reserves to weather growing financial challenges.”
Specific Examples of Planned Sales
Medway Council in Kent said its asset disposal plan featured the sale of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Increases and Broader Financial Pressures
This research of councils in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will have to raise local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities this week further found council budgets being strained by the growing number of young people and adults requiring Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (IMD) covering UK local authorities, many 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 top 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the extent of challenges confronting municipal officials across major urban centers in the coming year,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
