Based on a recent poll of municipal councils, English councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of playing fields and land to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and using savings to manage increasing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in southeast England said its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in Rochester to raise £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the strategy.
Local Levy Increases and Broader Fiscal Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to increase council taxes next April to cover the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both improved services and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils this week also found local finances being stretched by the growing number of children and older individuals needing special educational assistance.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties facing municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the actual extent of deprivation and demand,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study revealed.
