According to a recent study of local authorities, English councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of public land and land to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to generate funds from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and utilising savings to manage growing financial challenges.”
Specific Cases of Planned Sales
One local authority in Kent said its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Financial Pressures
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase council taxes next spring to address the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils recently also found local finances being stretched by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (IMD) for English councils, several participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely 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 concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
