According to a new poll of municipal councils, English councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to support their budgets, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of councils seeking to generate funds from a quick sale of holdings marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to generate 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase local levies next April to cover the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils this week further found local finances being strained by the increasing figures of young people and adults needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most deprived in England.
- “Member cities like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, cities 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 next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised care services in the past 12 months, the study found.
