According to a latest poll of local authorities, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK reported that six out of ten of councils are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of public land and land to support their budgets, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of authorities seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using financial reserves to manage increasing fiscal pressures.”
Specific Cases of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in another town to generate 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Wider Fiscal Strains
The survey of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will need to raise council taxes next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
A survey of county councils this week also found local finances being strained by the growing number of children and adults requiring special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of challenges confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and need,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
