Based on a recent poll of municipal councils, English councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that six out of ten of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Planned Sales
Medway Council in Kent announced its asset disposal plan featured the sale of a retail complex in Rainham and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Increases and Broader Fiscal Strains
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next spring to cover the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will continue 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.”
National Trends and Forecasts
A survey of county councils this week also found local finances being strained by the increasing figures of young people and adults needing Send support.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until next year after a policy document 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 among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures highlights the scale of difficulties facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and need,” stated a council leader.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey found.
