Based on a latest poll of local authorities, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that 60% of local authorities are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of public land and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and utilising financial reserves to weather increasing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in Kent announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- A local golf course and business parks held in two English counties, which all generate rent for the authority, will also be sold under the plan.
Council Tax Rises and Wider Fiscal Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue to increase the pressures 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.”
Countrywide Trends and Forecasts
Research of county councils recently also found council budgets being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the scale of challenges facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the survey revealed.
