Based on a latest study of local authorities, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and using financial reserves to weather growing financial challenges.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Strains
The survey of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of councils will need to raise council taxes next spring to cover the growing cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will persist 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 extremely difficult.”
National Patterns and Forecasts
Research of regional authorities this week further found council budgets being strained by the growing number of young people and adults requiring Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, many key cities members were included in the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties confronting local leaders across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting funding system that reflects and responds to the real levels of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions 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 last year, the study found.
