According to a new survey of local authorities, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and land to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of councils attempting to generate funds from a quick sale of assets marked “a distinct shift 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.”
Detailed Examples of Proposed Disposals
One local authority in southeast England said its property management strategy featured the disposal of a shopping centre in a local town and a social club in another town to raise 20 million pounds over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the plan.
Council Tax Increases and Wider Financial Pressures
This research of local authorities in the coalition, which includes several urban centers, also found that more than 70% of authorities will have to increase council taxes next April to cover the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “We face demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
Research of regional authorities this week also found council budgets being strained by the growing number of young people and older individuals requiring special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (IMD) covering UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” said the report.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the extent of challenges facing local leaders across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the study found.
