Based on a recent poll of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and land to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its property management strategy included the disposal of a shopping centre in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Council Tax Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers several urban centers, further found that over seven in ten of authorities will need to raise local levies next spring 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, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures take time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “We face 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 very challenging.”
National Trends and Projections
Research of county councils this week also found council budgets being stretched by the increasing figures of children and adults requiring special educational assistance.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (IMD) for English councils, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of the nation. The data underscores the scale of challenges facing local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and demand,” said a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the study found.
