Based on a new study of municipal councils, English councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of councils are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and land to support their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities seeking to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in a local town and a social club in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of councils will have to raise local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “We face population challenges which will persist to add to the pressures 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 Forecasts
A survey of regional authorities recently further found local finances being stretched by the increasing figures of young people and older individuals needing Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the last year, the study found.
