According to a latest study of local authorities, English councils are preparing to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England reported that 60% of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and land to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage growing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in Kent said its asset disposal plan featured the disposal of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Broader Financial Strains
This research of councils in the coalition, which includes several urban centers, also found that over seven in ten of councils will have to increase local levies next April to cover the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of county councils recently also found local finances being stretched by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the scale of difficulties facing local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and need,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the survey found.
