Based on a latest study of municipal councils, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and land to support their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of authorities seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Specific Cases of Planned Sales
Medway Council in southeast England announced its asset disposal plan included the disposal of a retail complex in a local town and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Rises and Broader Financial Strains
This research of councils in the key cities group, which includes several urban centers, further found that over seven in ten of councils will need to increase council taxes next April to cover the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales 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 innovative approaches but some of these require time to achieve both better provisions and financial savings,” said a council leader.
He continued: “There are population challenges 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.”
Countrywide Trends and Projections
Research of county councils recently also found local finances being stretched by the growing number of young people and adults requiring special educational assistance.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) covering English councils, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of England. The figures highlights the scale of difficulties facing local leaders across key cities in the next twelve months,” the report 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 Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study revealed.
