Based on a recent survey of municipal councils, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England reported that six out of ten of councils are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of playing fields and land to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of authorities seeking to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and using financial reserves to manage growing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in Kent announced its asset disposal plan included the disposal of a retail complex in a local town and a community venue in another town to generate 20 million pounds over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase local levies next April to address the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to achieve both better provisions and financial savings,” said a council leader.
He continued: “We face demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
Research of county councils recently further found council budgets being strained by the growing number of young people and adults needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Deprivation and Financial Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” said the report.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the scale of challenges facing municipal officials across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study found.
