According to a recent poll of local authorities, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England 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.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of authorities seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and utilising savings to weather growing financial challenges.”
Detailed Cases of Proposed Sales
Medway Council in southeast England announced its asset disposal plan included the sale of a shopping centre in Rainham and a social club in Rochester to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will have to raise council taxes next April to cover the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He added: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities this week also found council budgets being stretched by the growing number of children and older individuals requiring special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have put off scheduled changes to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (IMD) for English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that reflects and addresses the real levels of disadvantage and demand,” said a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
