According to a new study of local authorities, English councils are preparing to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of public land and land to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Detailed Cases of Planned Disposals
Medway Council in southeast England announced its property management strategy featured the sale of a retail complex in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Rises and Broader Fiscal Pressures
This research of local authorities in the coalition, which includes several urban centers, further found that more than 70% of authorities will have to increase local levies next April to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
A survey of county councils this week further found council budgets being strained by the growing number of children and adults requiring special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a white paper outlining those reforms has been postponed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” noted the study.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of challenges facing municipal officials across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
