Based on a recent poll of municipal councils, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England reported that 60% of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and land to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and utilising financial reserves to manage increasing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent said its property management strategy featured the disposal of a shopping centre in Rainham and a social club in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Strains
The survey of councils in the coalition, which includes several urban centers, also found that more than 70% of councils will need to increase local levies next April to address the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
Research of county councils recently also found local finances being stretched by the increasing figures of young people and adults requiring special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (IMD) covering English councils, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of challenges confronting local leaders across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and need,” said a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study found.
