Based on a recent poll 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 balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England stated that six out of ten of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and land to support their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of authorities attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to weather growing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in Kent said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in another town to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase council taxes next April to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of county councils this week also found local finances being stretched by the increasing figures of young people and adults requiring Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the scale of challenges facing municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and demand,” stated a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study found.
