According to a recent poll of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and land to shore up their finances, 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 councils seeking to raise money from a quick sale of holdings marked “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and using financial reserves to manage increasing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Financial Pressures
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to increase council taxes next April to address the rising 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, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both better provisions and financial savings,” said a council leader.
He continued: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently further found council budgets being strained by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (IMD) for UK local authorities, many key cities members 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 report.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The figures highlights the scale of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and demand,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the last year, the survey found.
