According to a new poll of municipal councils, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and open spaces to support their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a significant number of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan featured the disposal of a retail complex in a local town and a social club in Rochester to raise 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Broader Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase council taxes next April to cover the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “We face population challenges which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
Research of regional authorities this week also found council budgets being strained by the growing number of young people and adults requiring special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the Send system until next year after a white paper outlining those changes has been postponed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the survey revealed.
