Based on a new survey of local authorities, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in the UK stated that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and land to support their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of councils attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and using savings to weather increasing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a social club in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Local Levy Increases and Wider Financial Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise local levies next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these take time to deliver both improved services and financial savings,” stated a council leader.
He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils recently further found council budgets being strained by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (IMD) for English councils, several participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” noted the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The data underscores the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the study found.
