Based on a latest survey of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and land to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using financial reserves to manage increasing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in a local town and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the plan.
Local Levy Rises and Broader Financial Pressures
The survey of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of councils will need to raise local levies next April to address the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after steep rises 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 certain measures require time to achieve both improved services and financial savings,” stated Vince Maple.
He continued: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities recently further found council budgets being stretched by the increasing figures of children and adults requiring special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the Send system until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (IMD) for UK local authorities, many key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of England. The figures highlights the scale of challenges confronting municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the last year, the survey revealed.
