According to a new study of municipal councils, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and open spaces to support their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and utilising savings to manage growing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue 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 strategy.
Council Tax Increases and Broader Fiscal Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales after steep rises 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 some of these require time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils recently further found council budgets being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city 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 data highlights the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the study found.
