Based on a latest survey of local authorities, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for major urban areas in England reported that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and open spaces to support their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of authorities attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using savings to weather growing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in southeast England said its property management strategy featured the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Rises and Broader Fiscal Strains
The survey of councils in the coalition, which covers several urban centers, further found that over seven in ten of councils will need to raise local levies next spring to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, 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 Vince Maple.
He continued: “There are demographic pressures which will continue to add to the pressures 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 further found council budgets being stretched by the growing number of young people and adults needing Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures highlights the extent of challenges facing municipal officials across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and need,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey found.
