According to a recent survey of municipal councils, English councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and land to support their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage increasing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in Kent announced its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Rises and Wider Financial Strains
The survey of councils in the key cities group, which covers several urban centers, further found that more than 70% of councils will need to increase local levies next April to address the growing cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Patterns and Forecasts
Research of regional authorities recently also found local finances being strained by the increasing figures of young people and adults needing special educational assistance.
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 rising needs.
Government officials have put off planned reforms to the Send system until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (IMD) covering English councils, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of challenges confronting local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study found.
