According to a recent poll of local authorities, English councils are planning to sell social clubs, sports centres, 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 reported that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and land to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of authorities seeking to generate funds from a quick sale of holdings marked “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and using financial reserves to weather increasing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in southeast England said its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in another town to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Strains
The survey of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will need to raise local levies next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue to increase the pressures 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 Patterns and Forecasts
Research of county councils recently further found council budgets being strained by the increasing figures of children and older individuals needing Send support.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Government officials have put off planned reforms to the Send system until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (IMD) for English councils, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of challenges confronting municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey found.
