According to a latest poll of municipal councils, English councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK stated that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a high proportion of authorities seeking to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in southeast England said its property management strategy included the sale of a shopping centre in a local town and a community venue in another town 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 the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Financial Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase council taxes next April to address the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to achieve both improved services and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities this week also found local finances being strained by the growing number of children and older individuals needing Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes has been postponed.
Deprivation and Funding Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The figures underscores the extent of challenges confronting municipal officials across key cities in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and demand,” stated a council leader.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to cut, 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.
