According to a recent survey 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 balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils 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 adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and land to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and utilising savings to weather growing financial challenges.”
Specific Examples of Planned Sales
Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the strategy.
Council Tax Increases and Wider Fiscal Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that more than 70% of authorities will have to increase local levies next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Projections
A survey of county councils this week also found council budgets being strained by the growing number of children and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes has been postponed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and demand,” stated a council leader.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study revealed.
