According to 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 stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and using savings to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in southeast England said its asset disposal plan included the sale of a retail complex in Rainham and a community venue in another town to generate 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Broader Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise local levies next spring to cover the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He continued: “There are demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities this week further found local finances being strained by the growing number of children and older individuals needing special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the last year, the survey revealed.
