Based on a latest survey of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of local authorities are planning to sell assets 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 open spaces to support their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group said that a high proportion of councils seeking 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 said they would prioritise service redesigns and utilising savings to weather increasing financial challenges.”
Specific Examples of Planned Sales
Medway Council in southeast England said its property management strategy included the disposal of a shopping centre in Rainham and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and business parks 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 Broader Fiscal Pressures
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils recently also found local finances being stretched by the increasing figures of young people and older individuals needing special educational assistance.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by 2029, 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 changes has been postponed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (IMD) covering English councils, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of difficulties confronting municipal officials across key cities in the coming year,” the report added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and demand,” stated a council leader.
“Without this, councils 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 councils have cut or compromised care services in the last year, the study revealed.
