Based on a latest poll of local authorities, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously come under fire 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.
This coalition noted that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to manage growing fiscal pressures.”
Detailed Cases of Proposed Sales
One local authority in Kent said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Increases and Wider Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of councils will have to increase local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these take time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities recently also found council budgets being stretched by the growing number of young people and older individuals requiring Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the extent of challenges facing municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
