According to a recent study of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and land to support their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of authorities attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in Kent announced its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, further found that over seven in ten of councils will have to raise local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of county councils this week further found council budgets being strained by the growing number of young people and adults requiring special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (IMD) for English councils, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the extent of challenges facing local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and demand,” stated a council leader.
“Without this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
