According to a new poll of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Financial 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 dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and using savings to manage growing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in Kent said its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in another town to raise £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Increases and Wider Financial Strains
The survey of councils in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will have to raise local levies next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue to increase 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.”
National Trends and Projections
Research of county councils recently further found local finances being strained by the increasing figures of children and adults needing Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have put off scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the scale of difficulties confronting local leaders across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the survey found.
