Based on a new survey of municipal councils, English councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% 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 selling playing fields and land to support their finances, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Detailed Cases of Proposed Disposals
Medway Council in Kent announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Financial Strains
The survey of councils in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will have to increase council taxes next spring to address the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of county councils recently further found council budgets being strained by the increasing figures of young people and adults needing special educational assistance.
The County Councils Network said that council deficits will hit £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 white paper setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey found.
