According to a new poll of local authorities, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to meet 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 open spaces to support their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to raise money from a quick 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 utilising financial reserves to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
Medway Council in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Increases and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of councils will need to raise council taxes next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, 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,” stated a council leader.
He added: “There are demographic pressures which will continue 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.”
Countrywide Trends and Forecasts
A survey of regional authorities this week also found council budgets being stretched by the growing number of young people and adults requiring Send support.
A network of councils said 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 put off scheduled changes to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Deprivation and Funding Gaps
According to the latest deprivation measures (IMD) for English councils, many key cities members were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the extent of challenges confronting municipal officials across major urban centers in the coming year,” the report added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
