Based on a latest study of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of local authorities are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their finances, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of councils attempting to generate funds from a quick sale of holdings 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 weather growing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in Kent announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Rises and Broader Fiscal Pressures
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of county councils recently further found council budgets being stretched by the increasing figures of children and older individuals needing Send support.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale 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 funding system that reflects and responds to the real levels of disadvantage and need,” stated 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 disadvantage of their communities.”
One in five of councils have cut or compromised care services in the past 12 months, the study found.
