According to a latest poll of municipal councils, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and open spaces to shore up their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition noted that a significant number of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in Kent said its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Rises and Wider 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 authorities will need to raise local levies next April to address the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of county councils recently further found local finances being strained by the growing number of children and older individuals requiring special educational assistance.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (IMD) covering English councils, several key cities members were among the most deprived in England.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” said the study.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the survey revealed.
