Based on a recent study of local authorities, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and land to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and using financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will have to increase council taxes next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “There are population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities this week further found council budgets being stretched by the increasing figures of children and adults needing Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes has been postponed.
Deprivation and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The data underscores the scale of challenges confronting local leaders across key cities in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and demand,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey found.
