According to a recent survey of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and open spaces to support their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and using financial reserves to weather increasing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in Kent announced its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to generate 20 million pounds over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase local levies next spring to cover the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of regional authorities recently also found council budgets being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) covering English councils, many participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures underscores the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and responds to the real levels of deprivation and demand,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study revealed.
