According to a new study of municipal councils, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK reported that six out of ten of local authorities are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling public land and land to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of authorities seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Planned Sales
One local authority in southeast England announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Rises and Broader Financial Pressures
This research of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will need to raise council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both improved services and financial savings,” stated Vince Maple.
He continued: “We face demographic pressures 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 very challenging.”
Countrywide Patterns and Projections
A survey of county councils recently also found local finances being stretched by the increasing figures of children and adults needing Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the Send system until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many 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 top 30 nationally under the latest IMD measures,” noted the report.
“While 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 most deprived fifth of the nation. The figures highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
