According to a new study of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling playing fields and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of councils seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and using savings to manage growing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in Kent announced its property management strategy included the sale of a shopping centre in a local town and a social club in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Increases and Wider Financial Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise local levies next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Projections
A survey of regional authorities this week also found council budgets being stretched by the increasing figures of children and older individuals requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the study revealed.
