Based on a recent survey 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 Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that 60% of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to support their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and using savings to weather growing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in Kent said its asset disposal plan included the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next April to address the growing cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both better provisions and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures 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 extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities this week also found local finances being stretched by the increasing figures of children and adults needing Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (IMD) for English councils, several key cities members were among the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened social care provision in the last year, the survey found.
