Based on a recent poll of local authorities, English councils are preparing to offload community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and using financial reserves to weather increasing fiscal pressures.”
Specific Cases of Proposed Disposals
Medway Council in Kent said its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Rises and Wider Fiscal 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 April to address the rising cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
Research of county councils this week further found local finances being strained by the increasing figures of children and older individuals needing Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The data underscores the scale of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the last year, the survey found.
