According to a recent survey of local authorities, English councils are preparing to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of councils are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of public land and land to support their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of councils seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would prioritise restructuring services and utilising financial reserves to weather increasing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent said its asset disposal plan featured the disposal of a shopping centre in a local town and a social club in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Pressures
This research of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of authorities will need to raise council taxes next April to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these take time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities recently further found council budgets being strained by the growing number of children and adults needing Send support.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of challenges confronting municipal officials across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the survey revealed.
