Based on a recent study of local authorities, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of councils are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and land to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Specific Cases of Planned Sales
Medway Council in Kent said its asset disposal plan included the disposal of a shopping centre in a local town and a social club in Rochester to raise 20 million pounds over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise council taxes next April to cover the growing cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with property disposals 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 adopting innovative approaches but some of these require time to deliver both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Patterns and Forecasts
Research of county councils recently further found council budgets being strained by the growing number of children and adults needing special educational assistance.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (IMD) covering English councils, many participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the extent of difficulties facing municipal officials across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and need,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study found.
