According to a new study of municipal councils, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and land to support their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and using savings to manage growing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Local Levy Rises and Wider Financial Strains
The survey of local authorities in the coalition, which covers several urban centers, also found that more than 70% of councils will have to increase local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils recently also found local finances being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (IMD) covering 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 IMD measures,” noted the study.
“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 challenges facing local leaders across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the last year, the survey found.
