According to a new survey of municipal councils, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to support their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent said its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the strategy.
Local Levy Increases and Broader Fiscal Pressures
This research of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of authorities will need to raise local levies next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently also found council budgets being strained by the increasing figures of children and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (IMD) for UK local authorities, several key cities members were included in the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties facing local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and demand,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the study found.
