Based on a latest study of local authorities, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling playing fields and land to shore up their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a significant number of councils seeking to generate funds from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and utilising savings to manage increasing financial challenges.”
Specific Examples of Proposed Sales
One local authority in southeast England announced its property management strategy included the disposal of a retail complex in Rainham and a community venue in Rochester to generate 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Financial Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next April to address the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both improved services and financial savings,” stated a council leader.
He continued: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of regional authorities this week also found council budgets being strained by the growing number of children and adults needing Send support.
The County Councils Network projected 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 scheduled changes to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the report.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of challenges facing local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the last year, the survey revealed.
