According to a latest study of local authorities, English councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that six out of ten of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and land to shore up their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of councils attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and using financial reserves to manage growing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Rises and Broader Financial Pressures
This research of councils in the key cities group, which covers several urban centers, also found that more than 70% of authorities will need to raise council taxes next spring to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these take time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “We face population challenges which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils recently also found council budgets being strained by the growing number of children and older individuals requiring Send support.
A network of councils projected that council deficits will reach 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 special educational needs framework until next year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (IMD) covering English councils, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is among the ten most deprived for deprived neighbourhoods nationally, 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 major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Without 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 residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study revealed.
