Based on a new survey of local authorities, English councils are planning to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in Kent said its asset disposal plan included the sale of a shopping centre in Rainham and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Council Tax Rises and Broader Fiscal Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase council taxes next spring to cover the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures require time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Forecasts
A survey of county councils this week further found local finances being stretched by the growing number of children and adults requiring special educational assistance.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper setting out those changes has been postponed.
Deprivation and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The data highlights the extent of challenges facing municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the last year, the survey found.
