According to a recent survey of local authorities, 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 Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to manage growing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England announced its property management strategy featured the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Broader Fiscal Strains
This research of councils in the coalition, which includes several urban centers, further found that over seven in ten of councils will have to raise council taxes next April to address the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
Research of county councils recently further found council budgets being stretched by the growing number of children and older individuals requiring 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 grapple to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms has been postponed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (IMD) covering UK local authorities, several key cities members were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of difficulties confronting local leaders across major urban centers 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,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the last year, the study revealed.
