Based on a latest survey of local authorities, English councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of local authorities are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and using savings to weather increasing fiscal pressures.”
Detailed Cases of Proposed Sales
Medway Council in Kent announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Broader Fiscal Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to raise local levies next April to address the growing cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of regional authorities recently also found local finances being stretched by the growing number of young people and adults needing Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (IMD) covering English councils, many participating urban areas were included in the most deprived in England.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” said the report.
“While only one key city is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The figures highlights the scale of difficulties facing local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study revealed.
