According to a new study of municipal councils, English councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of local authorities are planning to dispose of properties to cover the escalating 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 argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and using savings to weather increasing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in southeast England announced its property management strategy included the disposal of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Rises and Wider Fiscal Strains
The survey of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will have to increase council taxes next April to address the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both improved services and financial savings,” said Vince Maple.
He continued: “There are population challenges which will continue to add to 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
A survey of county councils this week further found local finances being strained by the growing number of children and adults needing special educational assistance.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of challenges facing local leaders across key cities in the coming year,” the report added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
