According to a recent poll of municipal councils, English councils are planning to sell social clubs, sports centres, 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 England reported that six out of ten of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of public land and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of councils seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and utilising savings to weather growing financial challenges.”
Specific Examples of Proposed Sales
One local authority in Kent announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Rises and Broader Fiscal Pressures
The survey of councils in the coalition, which covers several urban centers, further found that over seven in ten of authorities will have to raise local levies next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority said it will press ahead with asset sales 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 innovative approaches but some of these take time to deliver both improved services and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities this week also found council budgets being stretched by the growing number of children and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (IMD) for UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the extent of difficulties facing municipal officials across major urban centers in the next twelve months,” the report concluded.
“Local government leaders 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.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the survey found.
