According to a new poll of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of authorities attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and using savings to weather increasing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in southeast England said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Rises and Wider Fiscal Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase council taxes next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and financial savings,” stated a council leader.
He added: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities this week also found local finances being stretched by the growing number of young people and older individuals needing special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (IMD) covering English councils, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the scale of challenges facing local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the study found.
