Based on a latest survey of local authorities, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of properties to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils seeking to generate funds 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 service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Specific Cases of Planned Disposals
One local authority in southeast England announced its property management strategy included the sale of a shopping centre in a local town and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Rises and Wider Fiscal Strains
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase council taxes next spring to address the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority said it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both improved services and cost efficiency,” stated Vince Maple.
He continued: “There are demographic pressures which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
A survey of regional authorities this week also found local finances being stretched by the growing number of children and adults needing Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Ministers have put off planned reforms to the Send system until next year after a white paper outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the scale of challenges facing local leaders across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“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 reduced or weakened social care provision in the past 12 months, the study found.
