Based on a recent survey of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and open spaces to support their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of councils seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in Kent said its asset disposal plan featured the sale of a retail complex in Rainham and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Pressures
The survey of local authorities in the coalition, which covers several urban centers, further found that more than 70% of authorities will have to increase council taxes next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases 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 financial savings,” said a council leader.
He continued: “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 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities this week further found council budgets being stretched by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (IMD) for English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of challenges facing local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of deprivation and need,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study revealed.
