Based on a recent study of municipal councils, English councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of councils are planning to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of councils attempting to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise service redesigns and using savings to weather increasing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in southeast England said its property management strategy included the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over five years.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Increases and Wider Financial Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to increase council taxes next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of regional authorities this week also found council budgets being stretched by the growing number of young people and adults requiring Send support.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties facing municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey found.
