According to a new study of municipal councils, English councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of councils are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of public land and land to shore up their finances, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and using financial reserves to weather growing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in southeast England said its asset disposal plan included the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the plan.
Local Levy Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which includes several urban centers, also found that more than 70% of authorities will need to increase local levies next spring to address the growing cost of essential services, increased rates 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 adopting creative strategies but certain measures take time to deliver both better provisions and financial savings,” stated a council leader.
He added: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of regional authorities this week also found council budgets being stretched by the increasing figures of children and adults requiring Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the scale of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and need,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study revealed.
