Based on a recent study of municipal councils, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in England reported that 60% of councils are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Increases and Wider Financial Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of councils will need to raise local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures which will continue to increase the pressures 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 Patterns and Forecasts
Research of regional authorities this week also found council budgets being stretched by the increasing figures of children and older individuals needing Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (IMD) for English councils, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and responds to the real levels of deprivation and demand,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
