According to a recent poll of municipal councils, English councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK reported that six out of ten of local authorities are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of public land and open spaces to support their finances, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils attempting to generate funds 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 financial challenges.”
Specific Cases of Planned Sales
Medway Council in Kent announced its asset disposal plan included the disposal of a retail complex in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Fiscal Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase local levies next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils recently also found local finances being stretched by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (IMD) covering English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city 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 facing local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the last year, the survey revealed.
