According to a latest poll of local authorities, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK reported that six out of ten of local authorities are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of public land and land to support their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Cases of Proposed Disposals
Medway Council in Kent said its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of councils in the coalition, which includes several urban centers, further found that more than 70% of councils will have to raise council taxes next April to address the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of regional authorities recently also found local finances being strained by the increasing figures of children and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they grapple to manage rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (IMD) for English councils, many key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of challenges facing municipal officials across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey found.
