Based on a new survey of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of councils are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for selling public land and land to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils seeking to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre 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 Increases and Broader Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to raise local levies next spring to address the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both better provisions and financial savings,” stated a council leader.
He added: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of county councils this week also found council budgets being strained by the growing number of young people and older individuals needing Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (IMD) for English councils, many key cities members were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and demand,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
