According to a new survey of municipal councils, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils representing major urban areas in England stated that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for selling playing fields and land to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a significant number of authorities seeking to generate funds from a quick 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 manage increasing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in southeast England said its property management strategy included the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Financial Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise local levies next April to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He added: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils recently further found local finances being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only one key city is in the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the scale of challenges facing municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, 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.
