According to a new poll of municipal councils, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of councils seeking to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would prioritise restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in southeast England announced its asset disposal plan included the disposal of a retail complex in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Financial Pressures
The survey of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of councils will have to increase local levies next April to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
Research of regional authorities recently further found local finances being stretched by the increasing figures of young people and adults requiring Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and demand,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the study found.
