According to a new study of local authorities, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils attempting to generate funds from a fire sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in Kent said its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Broader Financial Strains
The survey of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of councils will have to raise local levies next spring to address the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Forecasts
Research of regional authorities recently further found local finances being stretched by the growing number of children and adults needing Send support.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes has been postponed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The figures underscores the extent of challenges confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey revealed.
