According to a new study of municipal councils, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and land to support their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group said that a significant number of councils seeking to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in Kent said its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to generate 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to raise local levies next April to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant 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 increasing figures of children and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Government officials 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 Shortfalls
Based on the most recent indices of deprivation (IMD) for English councils, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of challenges confronting local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
