Based on a latest survey of municipal councils, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of councils are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and land to shore up their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said 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 (60%) of local leaders said they would prioritise service redesigns and using savings to manage growing financial challenges.”
Detailed Cases of Proposed Sales
One local authority in Kent announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Council Tax Rises and Wider Fiscal Pressures
This research of councils in the coalition, which includes several urban centers, further 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 homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures take time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities this week also found council budgets being strained by the growing number of children and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (IMD) covering UK local authorities, many key cities members 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 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of challenges confronting municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study found.
