According to a recent survey of municipal councils, English councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that 60% of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and open spaces to support their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and utilising financial reserves to weather increasing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in Kent announced its property management strategy included the disposal of a retail complex in Rainham and a social club in another town to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Rises and Wider Fiscal Strains
This research of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will have to raise council taxes next April to cover the growing cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils recently also found council budgets being stretched by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties facing local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and need,” said a council leader.
“Without this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the last year, the survey revealed.
