Based on a new survey of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Pressures Drive 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 cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and land to support their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of councils attempting to raise money from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and using savings to manage growing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in another town to generate 20 million pounds over the next half-decade.
- 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.
Local Levy Rises and Wider Fiscal Pressures
The survey of local authorities in the coalition, which covers several urban centers, also found that more than 70% of authorities will have to raise council taxes next April to cover the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but certain measures take time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of county councils recently further found council budgets being stretched by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of England. The figures highlights the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis added.
“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 deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey found.
