Based on a new poll of municipal councils, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for major urban areas in England stated that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and land to shore up their finances, but they contend they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a significant number 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 said they would focus on restructuring services and using financial reserves to manage increasing financial challenges.”
Specific Cases of Proposed Sales
Medway Council in Kent announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Local Levy Rises and Broader Fiscal Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to raise local levies next April to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently further found council budgets being strained by the growing number of children and adults requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of deprivation and need,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the survey revealed.
