Based on a latest survey of municipal councils, English councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England reported that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to support their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of councils attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and using savings to manage growing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in Kent announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Increases and Broader Financial Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
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 central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities this week further found council budgets being strained by the growing number of children and older individuals requiring Send support.
A network of councils said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (IMD) covering English councils, several participating urban areas were included in the most deprived 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 in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and demand,” said a council leader.
“Without this, councils will persist 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 survey revealed.