According to a latest 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 properties to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling public land and land to shore up their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of councils attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and utilising savings to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Wider Fiscal Strains
The survey of councils in the key cities group, which includes several urban centers, also found that over seven in ten of councils will have to raise council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will continue 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 extremely difficult.”
National Trends and Forecasts
Research of county councils this week also found local finances being strained by the growing number of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services 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 last year, the study found.
