According to a latest study of municipal councils, English councils are planning to offload community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and land to support their finances, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of councils attempting to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and utilising savings to manage increasing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in Kent said its asset disposal plan featured the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
The survey of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of councils will have to increase council taxes next April to address the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both improved services and cost efficiency,” 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 drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils recently also found local finances being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of challenges confronting municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the survey revealed.
