According to a latest poll of local authorities, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils representing major urban areas in the UK reported that six out of ten of local authorities are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and land to support their budgets, 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 fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and using savings to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Rises and Broader Fiscal Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that over seven in ten of authorities will have to increase council taxes next April to address the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
Research of county councils recently also found local finances being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (IMD) for English councils, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” noted the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The data highlights the scale of challenges confronting municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
