According to a recent survey of local authorities, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of local authorities are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling public land and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a significant number of authorities attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in southeast England said its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise council taxes next April to address the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “We face population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently further found local finances being stretched by the growing number of children and adults needing special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (IMD) for UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The figures underscores the scale of difficulties facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the survey found.
