According to a new study of local authorities, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling playing fields and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of authorities attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise service redesigns and utilising financial reserves to weather increasing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in Kent announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to raise 20 million pounds over five years.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Broader Financial Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to deliver both better provisions and cost efficiency,” said a council leader.
He added: “We face population challenges 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 2010-24, which is very challenging.”
National Patterns and Forecasts
Research of regional authorities recently further found local finances being strained by the increasing figures of children and older individuals requiring special educational assistance.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to 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 rank in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the extent of difficulties facing local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage 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.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
