Based on a latest survey of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and utilising savings to weather growing financial challenges.”
Detailed Cases of Proposed Sales
One local authority in Kent announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Rises and Broader Fiscal Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase council taxes next spring to cover the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils this week further found council budgets being strained by the increasing figures of children and adults needing special educational assistance.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (IMD) covering UK local authorities, many key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the report.
“While only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are much more prone 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 concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the survey found.
