Based on a new survey of municipal councils, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of playing fields and land to shore up their budgets, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a significant number of councils attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and utilising financial reserves to manage growing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Increases and Broader Financial Pressures
The survey of councils in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will have to increase council taxes next April to address the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities recently further found council budgets being strained by the growing number of children and adults needing Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Government officials have put off planned reforms to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and need,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
