Based on a new study of municipal councils, English councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”
Specific Examples of Planned Sales
Medway Council 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 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Wider Financial Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase council taxes next spring to address the growing cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures require time to achieve both better provisions and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
Research of regional authorities this week also found local finances being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network said that local shortfalls will hit £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 the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most deprived in England.
- “Member cities like several major towns place in the top 30 nationally under the latest deprivation indices,” said the study.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of challenges confronting municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” said a council leader.
“Lacking this, councils will continue to face difficult decisions 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 cut or compromised social care provision in the past 12 months, the study revealed.
