Based on a latest poll of municipal councils, English councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for major urban areas in England reported that 60% of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and land to support their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and utilising savings to weather increasing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to generate 20 million pounds over the next half-decade.
- A local golf course 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 Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after steep rises 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 better provisions and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of regional authorities this week also found local finances being strained by the increasing figures of children and older individuals needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) covering UK local authorities, many participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the scale of challenges facing local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey found.
