According to a recent study of local authorities, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in England stated that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of public land and open spaces to support their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of councils seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Rises and Wider Financial Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase council taxes next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of county councils recently also found local finances being strained by the growing number of young people and adults requiring Send support.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the latest deprivation measures (IMD) for English councils, many key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of challenges facing municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and need,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the survey found.
