Based on a new poll of local authorities, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land to support their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group noted that a high proportion of councils seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and using financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its property management strategy 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 business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Rises and Wider Fiscal Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise local levies next April to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these take time to achieve 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 local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found local finances being strained by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (IMD) for English councils, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the extent of difficulties facing municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and demand,” said a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the last year, the study found.
