Based on a latest poll of local authorities, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of local authorities are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and land to support their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in Rochester to raise 20 million pounds over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Pressures
This research of councils 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 essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils this week also found local finances being stretched by the growing number of children and adults requiring special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures highlights the scale of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and demand,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
