Based on a new study of local authorities, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England stated that six out of ten of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to support their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and using savings to weather growing financial challenges.”
Specific Cases of Proposed Sales
One local authority in Kent announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the strategy.
Council Tax Increases and Broader Fiscal Pressures
This research of councils in the key cities group, which includes several urban centers, also found that more than 70% of councils will have to raise local levies next spring to cover the growing cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He continued: “We face demographic pressures which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities this week further found local finances being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” said the report.
“Although 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 England. The figures underscores the scale of difficulties facing municipal officials across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, 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 found.
