Based on a new poll of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK reported that 60% of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and land to support their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of councils seeking to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and using financial reserves to weather growing financial challenges.”
Specific Cases 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 Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Financial Strains
This research of councils in the key cities group, which covers several urban centers, further found that more than 70% of councils will need to raise council taxes next April to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both improved services and financial savings,” said Vince Maple.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of county councils recently further found council budgets being stretched by the increasing figures of children and older individuals requiring Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (IMD) for English councils, several participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of challenges facing local leaders across major urban centers 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 reflects and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the last year, the study found.
