Based on a latest study of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and land to support their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of authorities seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Detailed Cases of Proposed Sales
One local authority in Kent announced its asset disposal plan included the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both improved services and financial savings,” stated Vince Maple.
He continued: “We face population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of county councils recently also found local finances being stretched by the growing number of children and adults requiring Send support.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (IMD) for 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 IMD measures,” noted the study.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study revealed.
