Based on a latest poll of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their finances, but they contend they must continue to raise vital cash from property disposals or face insolvency.
This coalition noted that a high proportion of authorities seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and using savings to weather increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to raise 20 million pounds over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Council Tax Rises and Wider Financial Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to achieve both improved services and financial savings,” said Vince Maple.
He added: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils this week further found local finances being strained by the increasing figures of children and older individuals requiring special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (IMD) for UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the extent of challenges facing local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the study found.
