According to a new study of local authorities, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and land to support their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the plan.
Council Tax Rises and Wider Fiscal Strains
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of authorities will have to raise council taxes next April to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of children services, 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 improved services and cost efficiency,” stated Vince Maple.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils this week also found council budgets being strained by the growing number of young people and adults requiring special educational assistance.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds 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 outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (IMD) covering English councils, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and need,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey found.
