Based on a new poll of municipal councils, English councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England 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 faced criticism for disposing of playing fields and open spaces to support their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would focus on restructuring services and using savings to weather increasing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent announced its property management strategy included the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Increases and Broader Financial Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise local levies next April to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both improved services and financial savings,” said a council leader.
He added: “We face population challenges which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
Research of regional authorities this week also found council budgets being stretched by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Member cities 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 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 scale of challenges confronting municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study found.
