According to a new poll of local authorities, English councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and land to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a significant number of councils seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and using financial reserves to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan included the sale of a shopping centre in Rainham and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
This research of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of councils will have to raise local levies next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding 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, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and financial savings,” said Vince Maple.
He continued: “There are demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
A survey of regional authorities this week also found council budgets being stretched by the increasing figures of children and adults needing Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (IMD) covering UK local authorities, several key cities members were among the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties confronting municipal officials across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
