According to a latest poll of municipal councils, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of councils are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling public land and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities seeking to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in Kent said its property management strategy featured the sale of a shopping centre in Rainham and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Increases and Wider Fiscal Pressures
This research of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of authorities will need to raise local levies next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both improved services and financial savings,” said Vince Maple.
He added: “We face population challenges which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of regional authorities recently also found local finances being strained by the increasing figures of children and older individuals needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The figures highlights the scale of challenges facing municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study found.
