Based on a recent survey of local authorities, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of public land and land to shore up their budgets, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of authorities attempting to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and using savings to manage growing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in Kent announced its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Wider Fiscal Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next spring to address the growing cost of core provisions, higher levels 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, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will continue to increase 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 Trends and Forecasts
A survey of county councils this week further found council budgets being strained by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” said the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study found.
