According to a new poll of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing major urban areas in the UK stated that 60% of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of authorities attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage growing fiscal pressures.”
Specific Cases of Planned Sales
Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a social club in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Wider Financial Strains
The survey of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will have to increase council taxes next April to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
Medway council explained 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 short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and financial savings,” stated a council leader.
He added: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils this week further found local finances being stretched by the growing number of children and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is among the ten most deprived 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 difficulties confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the survey found.
