According to a recent study of local authorities, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and open spaces to shore up their finances, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of councils attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and using financial reserves to weather growing financial challenges.”
Specific Examples of Planned Sales
Medway Council in southeast England said its property management strategy featured the sale of a retail complex in Rainham and a social club in another town to raise £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Broader Fiscal Pressures
This research of local authorities in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will need to increase local levies next spring to address the growing cost of core provisions, higher levels 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, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “We face population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of county councils this week also found local finances being strained by the growing number of young people and older individuals needing Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The figures highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
