According to a recent poll of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of councils are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling public land and open spaces to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and utilising financial reserves to weather increasing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in southeast England announced its asset disposal plan featured the sale of a retail complex in Rainham and a community venue in Rochester to generate 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Rises and Wider Financial Strains
This research of local authorities in the coalition, which covers 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, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of regional authorities this week also found local finances being strained by the growing number of young people and adults needing Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the latest IMD measures,” said the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of challenges facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and demand,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study found.
