Based on a new poll of local authorities, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of local authorities are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling playing fields and land to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of councils attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to manage growing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its asset disposal plan featured the sale of a retail complex in Rainham and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase council taxes next April to cover the rising cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
Research of county councils this week further found local finances being stretched by the growing number of young people and adults requiring special educational assistance.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties confronting local leaders across key cities in the coming year,” 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 real levels of deprivation and demand,” stated 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 cut or compromised care services in the past 12 months, the survey revealed.
