Based on a recent poll of municipal councils, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of local authorities are intending to sell assets 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 land to support their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and utilising savings to manage increasing financial challenges.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its property management strategy featured the disposal of a retail complex in a local town and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Rises and Wider Financial Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority said it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities this week also found council budgets being stretched by the growing number of young people and adults requiring Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (IMD) for UK local authorities, several participating urban areas were included in the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the report.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of difficulties facing municipal officials across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey found.
