Based on a new poll of local authorities, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and land to support their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and utilising savings to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in Kent announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in Rochester to generate 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Rises and Broader Fiscal Strains
The survey of councils in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will have to increase local levies next April to cover the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales 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 creative strategies but some of these take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will persist to add to 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.”
National Patterns and Forecasts
Research of county councils recently also found council budgets being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Financial Gaps
According to the most recent deprivation measures (IMD) covering English councils, many participating urban areas were included in the most deprived in England.
- “Member cities like several major towns rank in the top 30 across the country under the latest deprivation indices,” said the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the scale of challenges facing municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
