Based on a new study of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and land to support their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of authorities seeking to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and using financial reserves to manage increasing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in southeast England announced its property management strategy featured the sale of a retail complex in a local town and a community venue in another town to generate £20m over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Broader Financial Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise local levies next April to cover the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He continued: “There are demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
A survey of county councils this week further found council budgets being stretched by the growing number of children and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Deprivation and Funding Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, many participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and need,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the last year, the study found.
