According to a recent survey of local authorities, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of local authorities are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their budgets, 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 authorities seeking to raise money from a quick sale of holdings marked “a clear change from 2024, when the largest share (60%) of municipal officials said they would focus on restructuring services and using financial reserves to weather growing financial challenges.”
Specific Examples of Proposed Sales
One local authority in southeast England announced its property management strategy featured the disposal of a shopping centre in Rainham and a social club in another town to generate 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise council taxes next April to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures take time to deliver both better provisions and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
Research of county councils this week also found council budgets being strained by the growing number of young people and adults needing Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Deprivation and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the last year, the survey found.
