Based on a recent survey of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK stated that six out of ten of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and land to support their finances, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds 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 utilising savings to weather increasing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in another town 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 Medway council, will also be disposed of under the plan.
Local Levy Rises and Wider Financial Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase local levies next April to address the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” 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 revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils this week further found local finances being strained by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (IMD) for UK local authorities, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties confronting municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey revealed.
