According to a new survey of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of playing fields and land to support their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of councils seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its property management strategy featured the sale of a shopping centre in a local town and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Increases and Wider Financial Pressures
The survey of local authorities in the coalition, which includes several urban centers, further found that more than 70% of councils will have to increase local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
A survey of county councils recently further found council budgets being strained by the increasing figures of children 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 grapple to cope with increased demand.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Financial Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “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 report.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Without 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 councils have cut or compromised care services in the last year, the study revealed.
