According to a latest poll of local authorities, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and land to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and using financial reserves to weather growing financial challenges.”
Specific Examples of Planned Sales
Medway Council in Kent announced its asset disposal plan included the sale of a retail complex in a local town and a social club in another town to raise £20m over the next half-decade.
- A local golf course and business parks held in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Broader Financial Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next April to cover the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will press ahead 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 better provisions and financial savings,” said Vince Maple.
He continued: “There are demographic pressures which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils recently also found council budgets being strained by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of challenges confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the study found.
