Based on a recent study of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in the UK stated that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of playing fields and open spaces to shore up their finances, but they contend they must continue to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of councils attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Increases and Wider Fiscal Strains
This research of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of councils will need to raise local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed 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 taking creative strategies but some of these take time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Projections
Research of regional authorities recently also found local finances being strained by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (IMD) for UK local authorities, several participating urban areas were among the most deprived in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the study.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of challenges facing municipal officials across key cities in the coming year,” the report added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and demand,” said a council leader.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened social care provision in the last year, the study revealed.
