Based on a latest poll of municipal councils, English councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of public land and open spaces to support their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of authorities attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage growing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase council taxes next April to address the rising cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals 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 innovative approaches but certain measures require time to achieve both improved services and financial savings,” stated Vince Maple.
He continued: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Projections
Research of regional authorities this week also found council budgets being strained by the growing number of children and adults needing Send support.
A network of councils said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper outlining those reforms has been postponed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
