Based on a new study of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that six out of ten of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of playing fields and land to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage growing fiscal pressures.”
Detailed Cases of Planned Sales
Medway Council in Kent said its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Rises and Broader Fiscal Strains
This research of councils in the coalition, which includes several urban centers, further found that more than 70% of councils will need to raise local levies next spring to cover the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will proceed with property disposals 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 taking innovative approaches but some of these require time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will continue 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.”
National Patterns and Projections
A survey of regional authorities recently further found local finances being stretched by the growing number of young people and older individuals needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the Send system until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent deprivation measures (IMD) for English councils, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of challenges confronting local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
