According to a recent survey of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and open spaces to support their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and utilising financial reserves to weather growing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in southeast England said its asset disposal plan included the sale of a retail complex in a local town and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will also be sold under the plan.
Local Levy Rises and Broader Financial Pressures
This research of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of authorities will have to increase local levies next April to cover the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures take time to achieve both improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of county councils this week further found local finances being stretched by the increasing figures of children and adults needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and need,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey found.
