Based on a latest poll of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of public land and open spaces to shore up 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 represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and utilising savings to weather increasing fiscal pressures.”
Detailed Cases of Planned Sales
Medway Council in Kent announced its property management strategy included the sale of a retail complex in a local town and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Strains
The survey of local authorities in the coalition, which covers several urban centers, also found that more than 70% of councils will have to raise local levies next spring to cover the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said 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 adopting innovative approaches but some of these require time to deliver both improved services and financial savings,” said Vince Maple.
He added: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of regional authorities recently also found council budgets being strained by the growing number of children and older individuals needing special educational assistance.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey found.
