Based on a latest study of municipal councils, English councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to shore up their budgets, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of authorities seeking to raise money from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a retail complex in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Rises and Broader Financial Strains
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase council taxes next April to address the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these take time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities this week further found council budgets being stretched by the growing number of children and adults requiring Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (IMD) for English councils, several participating urban areas were included in the most deprived in the country.
- “Member cities like several major towns place in the top 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely 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 next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the survey found.
