According to a latest poll of local authorities, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of local authorities are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling playing fields and open spaces to shore up their budgets, 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 authorities seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and using savings to weather growing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Strains
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of authorities will have to raise local levies next April to address the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but some of these require time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “We face demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
A survey of regional authorities this week also found council budgets being strained by the growing number of children and adults needing Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a policy document outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and need,” stated a council leader.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
