Based on a recent poll of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of public land 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.
The group said that a significant number of authorities attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Specific Cases of Proposed Sales
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 £20m 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 sold under the plan.
Council Tax Rises and Broader Financial Strains
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase council taxes next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils recently also found local finances being stretched by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) covering English councils, several key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and need,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the last year, the study found.
