Based on a new poll of municipal councils, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported 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.
Local governments have previously come under fire for disposing of public land and land to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted 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 (60%) of municipal officials stated they would focus on restructuring services and using savings to manage growing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in southeast England said its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Council Tax Increases and Broader Fiscal Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise local levies next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will persist to increase 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 Forecasts
Research of county councils this week further found local finances being stretched by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (IMD) covering UK local authorities, many key cities members were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the extent of difficulties facing municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
