According to a latest survey of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing 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 social services for vulnerable individuals.
Councils have in the past come under fire for disposing of playing fields and land to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and using financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan included the sale of a retail complex in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all generate rent for the authority, will also be sold under the plan.
Local Levy Increases and Wider Financial Strains
The survey of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of authorities will need to raise local levies next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of regional authorities this week also found council budgets being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of challenges facing local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and demand,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey found.
