According to a recent survey of municipal councils, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and land to support their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils seeking to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in Kent said its asset disposal plan included the sale of a shopping centre in Rainham and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, also found that over seven in ten of authorities will have to raise council taxes next April to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said 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 taking creative strategies but some of these take time to deliver both better provisions and financial savings,” said a council leader.
He added: “We face 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 Trends and Forecasts
Research of regional authorities recently further found council budgets being strained by the increasing figures of young people and older individuals requiring Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) covering UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” noted the report.
“While only one key city is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The data highlights the extent of difficulties facing municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and need,” stated a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study revealed.
