According to 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.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and land to support their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils seeking to raise money from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in southeast England said its asset disposal plan included the sale of a retail complex in Rainham and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Broader Financial Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next spring to address the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures require time to deliver both better provisions and cost efficiency,” stated a council leader.
He added: “There are population challenges which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities this week also found council budgets being strained by the growing number of young people and adults needing Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the extent of challenges confronting local leaders across major urban centers in the coming year,” the report added.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and need,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
