According to a latest study of municipal councils, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling public land and land to support their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and using savings to manage increasing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in Kent said its asset disposal plan included the sale of a shopping centre in Rainham and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Broader Financial Pressures
This research of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will need to raise local levies next spring to cover the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both improved services and financial savings,” said Vince Maple.
He added: “There are 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 over the past decade, which is very challenging.”
National Patterns and Forecasts
Research of regional authorities this week also found local finances being strained by the growing number of children and older individuals requiring special educational assistance.
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.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (IMD) covering English councils, several key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
