According to a recent study of local authorities, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and land to support their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of authorities attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England announced its property management strategy featured the disposal of a shopping centre in a local town and a social club in Rochester to generate 20 million pounds over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Rises and Broader Financial Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise council taxes next April to address the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council said it will proceed with property disposals after steep rises 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 require time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils recently further 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 £4.4bn a year by 2029, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (IMD) covering UK local authorities, several participating urban areas were among the most deprived in England.
- “Member cities 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 among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the extent of difficulties confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and need,” said a council leader.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, 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 study found.
