According to a new survey of local authorities, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of public land and land to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of authorities attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on restructuring services and utilising savings to weather growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent said its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Rises and Broader Financial Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to raise council taxes next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are population challenges which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found council budgets being stretched by the growing number of young people and older individuals requiring Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, 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 most deprived 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of difficulties confronting local leaders across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey found.
