Based on a recent survey of municipal councils, English councils are planning to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of councils are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and open spaces to support their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of authorities seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Proposed Sales
Medway Council in southeast England said its property management strategy included the disposal of a shopping centre in a local town and a social club in Rochester to generate £20m over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider Financial Strains
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise local levies next April to address the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will continue to increase the strains we have. As a unitary authority, 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 children and older individuals needing Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the study.
“While only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the scale of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey revealed.
