According to a new study of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of playing fields and open spaces to support their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and utilising savings to weather growing financial challenges.”
Specific Examples of Proposed Sales
One local authority in Kent announced its asset disposal plan featured the sale of a retail complex in a local town and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
This research of councils in the key cities group, which includes several urban centers, also found that more than 70% of councils will need to increase local levies next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of county councils this week also found council budgets being stretched by the growing number of children and adults needing Send support.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (IMD) covering English councils, many key cities members were included in the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of challenges facing municipal officials across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the study found.
