Based on a new survey of municipal councils, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and land to shore up their finances, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a significant number of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would focus on service redesigns and using savings to weather increasing financial challenges.”
Specific Examples of Planned Sales
Medway Council in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of councils will have to increase local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures 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 over the past decade, which is very challenging.”
National Trends and Projections
A survey of county councils this week also found council budgets being strained by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (IMD) covering UK local authorities, several participating urban areas were included in the most deprived in England.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the past 12 months, the study revealed.
