Based on a latest survey of municipal councils, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and open spaces to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in southeast England said its asset disposal plan featured the disposal of a shopping centre in a local town and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Increases and Broader Financial Strains
This research of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will have to increase council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “There are population challenges which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities this week also found council budgets being strained by the growing number of young people and older individuals needing Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties facing municipal officials across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study revealed.
