Based on a latest survey of municipal councils, English councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in England reported that 60% of local authorities are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to shore up their budgets, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
The group said that a significant number of councils seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its asset disposal plan featured the sale of a retail complex in a local town and a community venue in Rochester to generate 20 million pounds over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Rises and Broader Financial Strains
The survey of councils in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will need to increase local levies next April to address the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of county councils recently further found council budgets being strained by the increasing figures of children and older individuals needing Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (IMD) covering English councils, many key cities members were among the most deprived in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The figures highlights the scale of challenges confronting local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“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 communities.”
A fifth of councils have cut or compromised care services in the last year, the survey revealed.
