According to a new survey of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported that six out of ten of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and open spaces to shore up their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using savings to manage growing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in Kent announced its property management strategy included the sale of a retail complex in Rainham and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Broader Fiscal Pressures
This research of councils in the coalition, which includes several urban centers, further found that more than 70% of councils will need to raise local levies next April to address the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures take time to achieve both better provisions and financial savings,” stated Vince Maple.
He added: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Forecasts
A survey of regional authorities this week also found council budgets being stretched by the increasing figures of children and adults requiring special educational assistance.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties facing municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
