According to a new study of municipal councils, English councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in the UK reported that six out of ten of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and land to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its property management strategy included the sale of a shopping centre in Rainham and a social club in another town to raise £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next April to address the rising cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
Research of county councils recently further found council budgets being strained by the increasing figures of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the most recent indices of deprivation (IMD) covering English councils, several key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of difficulties confronting municipal officials across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey revealed.
