According to a recent survey of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling playing fields and land to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Broader Fiscal Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise council taxes next April to address the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both better provisions and financial savings,” stated a council leader.
He added: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Projections
A survey of county councils this week also found council budgets being stretched by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (IMD) covering English councils, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” noted the report.
“While only one key city is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties confronting 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 funding system that accounts for and responds to the real levels of deprivation and demand,” stated a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the survey found.
