Based on a new survey of municipal councils, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and open spaces to shore up their finances, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of councils attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan included the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Wider Financial Pressures
This research of local authorities in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will need to raise council taxes next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead 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 innovative approaches but certain measures require time to deliver both better provisions and financial savings,” stated Vince Maple.
He continued: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils recently also found council budgets being stretched by the growing number of children and older individuals requiring Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes has been postponed.
Deprivation and Financial Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and need,” said a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened social care provision in the last year, the survey revealed.
