According to a recent study of municipal councils, English councils are planning to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling public land and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using financial reserves to weather growing fiscal pressures.”
Detailed Cases of Proposed Disposals
Medway Council in southeast England announced its property management strategy featured the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Council Tax Increases 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 have to raise local levies next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils recently further found council budgets being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (IMD) for UK local authorities, many key cities members were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the past 12 months, the survey revealed.
