Based on a recent poll of local authorities, English councils are planning to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of councils attempting to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would focus on restructuring services and utilising savings to weather growing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in Kent said its asset disposal plan featured the sale of a retail complex in Rainham and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the strategy.
Council Tax Rises and Broader Fiscal Strains
The survey of councils in the key cities group, which includes several urban centers, further found that over seven in ten of councils will have to increase council taxes next spring to cover the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to deliver both better provisions and cost efficiency,” stated a council leader.
He added: “There are demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Trends and Projections
A survey of county councils recently also found council budgets being strained by the growing number of children and adults requiring Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of challenges facing municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and demand,” said a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
