According to a recent poll of municipal councils, English councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land to shore up their finances, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and using savings to weather growing financial challenges.”
Specific Cases of Proposed Disposals
One local authority in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Wider Financial Strains
The survey of councils in the coalition, which includes several urban centers, also found that over seven in ten of councils will need to raise council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of regional authorities recently further found local finances being strained by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of England. The data highlights the scale of challenges facing local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and demand,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, 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 study found.
