Based on a new study of local authorities, English councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and land to shore up their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of councils seeking 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 prioritise restructuring services and utilising savings to weather increasing financial challenges.”
Specific Cases of Planned Sales
Medway Council in southeast England announced its property management strategy featured the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise council taxes next spring to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
Research of county councils this week also found council budgets being strained by the growing number of children and adults needing Send support.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the Send system until next year after a policy document outlining those changes has been postponed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The figures highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and need,” said a council leader.
“Without this, local authorities will persist 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 social care provision in the past 12 months, the study found.
