Based on a recent poll of municipal councils, English councils are preparing to offload community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and using savings to weather increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in southeast England said its property management strategy featured the disposal of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Local Levy Rises and Wider Fiscal Strains
This research of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will need to increase council taxes next April to address the growing cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to achieve both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Projections
Research of county councils this week further found local finances being stretched by the increasing figures of young people and adults requiring Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of difficulties facing local leaders across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and demand,” stated a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised care services in the past 12 months, the study found.
