According to a new poll of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to support their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and utilising savings to manage growing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in Kent said its property management strategy included the disposal of a retail complex in Rainham and a social club in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Rises and Wider Fiscal Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next spring to address the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, 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 achieve both better provisions and cost efficiency,” said a council leader.
He added: “There are population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Projections
Research of regional authorities recently also found local finances being stretched by the increasing figures of children and adults needing special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those changes has been postponed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (IMD) covering English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and demand,” said a council leader.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the last year, the survey revealed.
