According to a new poll of municipal councils, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and land to support their finances, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and utilising financial reserves to weather increasing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent announced its property management strategy included the disposal of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and business parks held in two English counties, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Rises and Broader Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise local levies next spring to address the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils recently also found council budgets being strained by the growing number of children and adults needing special educational assistance.
A network of councils said that council deficits 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 planned reforms to the Send system until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study revealed.
