Based on a recent study of local authorities, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of public land 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 councils attempting to raise money from a quick sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and utilising savings to weather growing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in Kent said its asset disposal plan featured the disposal of a shopping centre in a local town and a social club in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of councils will need to increase council taxes next spring to address the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both improved services and cost efficiency,” stated Vince Maple.
He added: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
Research of county councils this week further found local finances being stretched by the increasing figures of young people and adults requiring Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, 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 most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and need,” said a council leader.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the last year, the survey found.
