According to a new survey of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England stated that six out of ten of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling public land and land 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 high proportion of authorities seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its property management strategy 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 commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that more than 70% of authorities will need to raise local levies next spring to address the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
Medway council explained it will proceed 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 taking innovative approaches but certain measures take time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities recently further found council budgets being strained by the increasing figures of children and older individuals needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several key cities members 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,” noted the report.
“Although only a single urban area 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 highlights the extent of challenges facing local leaders across major urban centers 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 need,” stated a council leader.
“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 communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study found.
