According to a new survey of municipal councils, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of councils are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling playing fields and land to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of councils attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and using savings to weather increasing fiscal pressures.”
Detailed Cases of Proposed Sales
Medway Council in Kent announced its property management strategy featured the disposal of a shopping centre in a local town and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Increases and Wider Financial Pressures
The survey of local authorities in the coalition, which covers several urban centers, also found that over seven in ten of councils will need to raise local levies next spring to cover the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these require time to achieve both improved services and financial savings,” stated a council leader.
He added: “There are population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
Research of regional authorities this week also found council budgets being strained by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the extent of challenges confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the study revealed.
