According to a new study of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities 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 in the past faced criticism for selling public land and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
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 (six in ten) of local leaders said they would focus on restructuring services and using savings to manage growing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in Kent announced its property management strategy featured the disposal of a shopping centre in a local town and a social club in Rochester 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.
Local Levy Rises and Wider Fiscal Strains
This research of councils in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will need to raise local levies next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both better provisions and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to add to 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 this week also found council budgets being stretched by the growing number of children and older individuals requiring special educational assistance.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (IMD) for English councils, several key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of challenges facing municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
