According to a latest study of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling public land and open spaces to support their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a significant number of authorities seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using savings to weather increasing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in Kent announced its property management strategy included the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Increases and Broader Financial Strains
This research of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of authorities will have to raise council taxes next April to cover the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will continue to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Forecasts
Research of county councils this week also found council budgets being stretched by the increasing figures of children and adults requiring special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most deprived in England.
- “Participating urban centers 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 one key city is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The data 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 accounts for and addresses the real levels of disadvantage and need,” said a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
