Based on a latest poll of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling playing fields and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would focus on restructuring services and using savings to manage growing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in southeast England announced its asset disposal plan included the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Rises and Broader Financial Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase council taxes next April to address the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “There are demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends 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 Send support.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have put off planned reforms to the Send system until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like several major towns place in the most deprived 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 disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The data highlights the scale of difficulties facing municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
