According to a new poll of local authorities, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of authorities attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”
Detailed Cases of Proposed Disposals
Medway Council in Kent announced its property management strategy featured the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Local Levy Rises and Wider Fiscal Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase council taxes next April to cover the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained 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 adopting innovative approaches but certain measures require time to deliver both improved services and cost efficiency,” stated a council leader.
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 central funding from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of county councils recently also found council budgets being strained by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the Send system until next year after a white paper outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the scale of challenges facing municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
