According to a latest poll of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in England reported that six out of ten of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of authorities seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and using financial reserves to weather increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the sale of a retail complex in a local town and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Rises and Wider Fiscal Strains
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 increase local levies next spring to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures take time to achieve both improved services and financial savings,” stated a council leader.
He continued: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities recently also found local finances being strained by the increasing figures of children and older individuals requiring special educational assistance.
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 delayed scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only one key city is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the study found.
