Based on a latest poll of municipal councils, English councils are preparing to offload community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of local authorities are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using savings to manage increasing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in Kent announced its asset disposal plan featured the disposal of a retail complex in a local town and a social club in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will have to raise local levies next April to address the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of county councils recently also found local finances being stretched by the growing number of children and older individuals needing special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a white paper outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the most recent deprivation measures (IMD) covering English councils, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The figures underscores the scale of difficulties facing local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study found.
