Based on a new poll of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of councils are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of playing fields and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and utilising savings to weather growing fiscal pressures.”
Detailed Examples of Planned Sales
Medway Council in southeast England announced its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Increases and Broader Financial Pressures
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 have to increase council taxes next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures take time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “There are 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 over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of regional authorities recently further found council budgets being stretched by the increasing figures of young people and adults requiring Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The data underscores the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and demand,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
