According to a new study 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.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of public land and land to shore up their finances, but they contend they must continue to raise vital cash from property disposals or face insolvency.
The group said that a significant number of authorities seeking to generate funds from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and utilising savings to weather growing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a retail complex in a local town and a social club in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Broader Fiscal Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase local levies next spring to address the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of county councils this week also found local finances being stretched by the growing number of young people and adults needing Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (IMD) covering English councils, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the scale of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and need,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
