According to a latest study of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and open spaces to shore up their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a significant number of authorities attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and utilising savings to weather growing financial challenges.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Council Tax Increases and Broader Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of councils will need to increase council taxes next April to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities this week also found council budgets being stretched by the increasing figures of children and older individuals requiring Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the Send system until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures highlights the extent of challenges confronting municipal officials across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.
