According to a latest poll of municipal councils, English councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling public land and land to support their finances, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using savings to manage growing financial challenges.”
Specific Cases of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will also be sold under the plan.
Council Tax Rises and Broader Financial Pressures
The survey of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of authorities will have to increase council taxes next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both improved services and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils this week also found local finances being stretched by the growing number of young people and older individuals needing Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the Send system until next year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (IMD) covering UK local authorities, several participating urban areas were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The figures underscores the scale of challenges confronting municipal officials across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and need,” said a council leader.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the survey found.
