Based on a new survey of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of authorities seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using savings to weather increasing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent said its property management strategy featured the disposal of a retail complex in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of councils in the coalition, which includes several urban centers, further found that more than 70% of councils will have to increase council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “We face population challenges which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Trends and Projections
A survey of regional authorities recently further found council budgets being stretched by the growing number of children and adults needing special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The data underscores the scale of challenges facing local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study revealed.
