Based on a latest poll of municipal councils, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and open spaces to shore up their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of councils seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and utilising savings to weather growing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its property management strategy included the sale of a retail complex in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Local Levy Rises and Wider Fiscal Strains
This research of councils in the coalition, which includes several urban centers, further found that more than 70% of authorities will have to raise local levies next spring to address the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils 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 projected that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” said the study.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the extent of challenges facing local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the study found.
