Based on a new poll of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK stated that 60% of local authorities are intending to dispose of properties 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 land to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Cases of Planned Disposals
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 the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the plan.
Council Tax Increases and Broader Fiscal Strains
This research of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of authorities will need to increase council taxes next April to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “We face demographic pressures which will persist to add to the pressures 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.”
Countrywide Trends and Projections
A survey of county councils this week further found council budgets being stretched by the increasing figures of young people and older individuals needing Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties confronting local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study found.
