According to a latest survey of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of public land and land to support their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of authorities attempting to raise money from a quick sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and using savings to manage growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in Kent announced its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Rises and Broader Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of councils will have to increase council taxes next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after sharp increases 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 require time to deliver both improved services and financial savings,” said Vince Maple.
He continued: “We face population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
A survey of regional authorities recently further found local finances being stretched by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The figures underscores the extent of challenges confronting municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the survey revealed.