Based on a latest poll of municipal councils, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England reported that 60% of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and land to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of councils seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and utilising savings to manage growing financial challenges.”
Specific Examples of Proposed Sales
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Financial Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase local levies next April to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of regional authorities this week also found council budgets being stretched by the growing number of children and older individuals requiring special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and need,” said a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the study found.
