Based on a new survey of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling playing fields and land to shore up their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising savings to manage growing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in Kent said its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase local levies next spring to address the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both improved services and financial savings,” said a council leader.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Projections
Research of county councils recently further found council budgets being stretched by the growing number of children and adults needing Send support.
A network of councils said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the Send system until next year after a policy document setting out those changes has been postponed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” said the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of challenges facing local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the study revealed.
