According to a latest study of local authorities, English councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling 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.
This coalition said that a significant number of councils seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”
Detailed Cases of Planned Disposals
One local authority in southeast England said its asset disposal plan included the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over the next half-decade.
- 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.
Council Tax Rises and Broader Fiscal Pressures
This research 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 increase local levies next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of regional authorities this week further found council budgets being stretched by the growing number of young people and adults needing Send support.
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 manage increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of challenges facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey found.
