Based on a recent survey of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and open spaces to support their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of councils attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and utilising savings to weather increasing financial challenges.”
Detailed Cases of Proposed Sales
Medway Council in southeast England announced its property management strategy included the sale of a retail complex in a local town and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Financial Strains
This research 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 spring to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after sharp increases 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 some of these take time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils recently also found local finances being strained by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (IMD) for English councils, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of England. The data highlights the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study revealed.
