According to a new study of local authorities, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to support their finances, but they contend they must continue to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of councils attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and utilising financial reserves to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Rises and Wider Fiscal Pressures
This research of councils in the coalition, which includes several urban centers, further found that more than 70% of authorities will need to raise council taxes next spring to cover the growing cost of essential services, increased rates of homelessness, and a longstanding 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, adult social care, and short-term housing.
“We are taking creative strategies but certain measures take time to deliver both improved services and cost efficiency,” stated a council leader.
He added: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently also found local finances being stretched by the growing number of children and older individuals needing special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (IMD) for English councils, many key cities members were among the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties confronting local leaders across major urban centers in the coming year,” the report added.
“Council officials have been clear about the need for a equitable and lasting funding system that reflects and responds to the real levels of disadvantage and demand,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
