Based on a recent survey of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England reported that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling public land and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of councils attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using savings to manage increasing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in Kent announced its property management strategy featured the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Rises and Broader Financial Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase local levies next spring to address the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils recently also found local finances being strained by the increasing figures of children and adults needing special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only one key city 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 data underscores the scale of challenges confronting municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the last year, the survey found.
