Based on a new survey of municipal councils, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and open spaces to support their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of authorities attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using savings to manage growing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in southeast England said its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Rises and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of councils will need to raise local levies next April to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures require time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
Research of regional authorities this week also found council budgets being stretched by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most deprived in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” said the study.
“While only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges confronting municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
