According to a new study of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated 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.
Councils have previously faced criticism for selling public land and land to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities attempting to generate funds from a quick sale of holdings marked “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and utilising savings to manage growing financial challenges.”
Specific Cases 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 social club in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Rises and Broader Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to deliver both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a drastic reduction 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 growing number of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Government officials have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Gaps
According to the latest deprivation measures (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only one key city is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of challenges facing municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and demand,” stated a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have cut or compromised care services in the past 12 months, the survey revealed.