Based on a recent poll of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in England reported that six out of ten of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and land to shore up their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and using financial reserves to weather growing fiscal pressures.”
Specific Examples of Proposed Sales
Medway Council in southeast England announced its property management strategy included the sale of a retail complex in Rainham and a social club in Rochester to generate 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase local levies next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures take time to achieve both improved services and financial savings,” said Vince Maple.
He added: “There are population challenges which will continue to increase the strains 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.”
National Trends and Projections
Research of regional authorities this week further found local finances being stretched by the increasing figures of young people and adults needing Send support.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and demand,” stated a council leader.
“Lacking this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
