Based on a new poll of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and using savings to manage increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in Kent announced its property management strategy featured the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the strategy.
Local Levy Increases and Broader Financial Strains
This research of councils in the coalition, which covers several urban centers, further found that over seven in ten of authorities will need to increase local levies next April to address the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of regional authorities recently also found local finances being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” said the study.
“Although only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and demand,” said a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the last year, the survey found.
