Based on a new study of local authorities, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling playing fields and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Increases and Wider Financial Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both better provisions and financial savings,” said a council leader.
He continued: “There are population challenges which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities recently further found local finances being stretched by the growing number of children and adults needing special educational assistance.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of difficulties facing municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and need,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions 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.
