Based on a latest survey of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and land to support their finances, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and utilising savings to weather increasing fiscal pressures.”
Detailed Examples of Planned 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 Rochester to generate £20m over the next half-decade.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise council taxes next spring to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals 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 achieve both improved services and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities recently also found council budgets being strained by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (IMD) for UK local authorities, many key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and need,” said a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the study revealed.
