Based on a recent study of municipal councils, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England stated that six out of ten of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and using financial reserves to manage growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Increases and Broader Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to raise council taxes next spring to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will proceed with property disposals after steep rises 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: “We face demographic pressures which will persist to increase 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 Patterns and Forecasts
A survey of regional authorities recently also found council budgets being strained by the growing number of young people and adults requiring 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 cope with increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (IMD) covering English councils, several participating urban areas were included in the most disadvantaged 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 IMD measures,” noted the study.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The data highlights the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study revealed.
