According to a new study of municipal councils, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for major urban areas in the UK reported that six out of ten of councils are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling public land and land to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group said that a significant number of councils attempting to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on restructuring services and using financial reserves to manage growing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in Kent said its property management strategy included the sale of a shopping centre in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Rises and Wider Financial Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase council taxes next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils this week further found local finances being strained by the increasing figures of children and older individuals needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of challenges confronting municipal officials across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey found.
