According to a new poll of local authorities, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK reported that 60% of local authorities are intending to dispose of properties to meet 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 budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would prioritise service redesigns and using financial reserves to weather increasing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in Kent announced its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in Rochester to raise 20 million pounds over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Rises and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise council taxes next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases 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 take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities recently also found council budgets being strained by the growing number of young people and adults requiring Send support.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Financial Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data highlights the scale of challenges confronting local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that reflects and addresses the real levels of deprivation and need,” stated a council leader.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study revealed.
