According to a latest study of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and open spaces to support their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a high proportion of authorities attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and utilising financial reserves to manage growing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a social club in another town to raise 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Increases and Wider Fiscal Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase local levies next April to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these take time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils this week also found council budgets being stretched by the increasing figures of young people and older individuals requiring Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (IMD) covering UK local authorities, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” said the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey found.
