Based on a new survey of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and open spaces to support their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and utilising savings to weather increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in Kent said its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise council taxes next spring to cover the growing cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales 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 require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities this week further found council budgets being strained by the growing number of young people and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the Send system until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The figures underscores the extent of difficulties confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the last year, the study revealed.
