Based on a new study of local authorities, English councils are planning to offload community centers, athletic facilities, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a high proportion of councils seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and using savings to weather growing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in Kent said its property management strategy included the disposal of a retail complex in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Local Levy Rises and Wider Financial Strains
This research of councils in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to increase council taxes next April to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these take time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities recently also found council budgets being strained by the growing number of children and older individuals needing Send support.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The data underscores the scale of challenges facing municipal officials across major urban centers in the coming year,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the survey revealed.
