Based on a new study of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that 60% of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of playing fields and open spaces to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and using financial reserves to weather increasing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in Kent said its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Financial Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both improved services and financial savings,” stated a council leader.
He added: “We face population challenges which will continue to increase 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.”
Countrywide Patterns and Projections
Research of county councils this week also found local finances being stretched by the increasing figures of young people and older individuals needing Send support.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties facing local leaders across key cities in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and demand,” said a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
