According to a latest study of municipal councils, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling playing fields and land to support their finances, but they argue they must continue to generate essential revenue 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 clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using savings to manage growing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be sold under the plan.
Council Tax Rises and Broader Fiscal Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next April to address the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both better provisions and financial savings,” said a council leader.
He continued: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of regional authorities recently further found local finances being stretched by the growing number of children and older individuals requiring Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the Send system until the coming year after a white paper setting out those changes has been postponed.
Deprivation and Financial Shortfalls
Based on the most recent deprivation measures (IMD) covering English councils, several participating urban areas 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 nationally under the latest deprivation indices,” said the study.
“While only one key city is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of challenges confronting local leaders across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study found.
