Based on a new poll of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for selling public land and open spaces to support their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of councils attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and utilising savings to weather increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in Kent announced its property management strategy featured the sale of a retail complex in a local town and a social club in another town to raise 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Rises and Broader Financial Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to raise council taxes next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of county councils this week further found local finances being stretched by the increasing figures of children and older individuals needing special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The data underscores the scale of challenges confronting local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study revealed.
