Based on a latest poll of municipal councils, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in England reported that 60% of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and open spaces to support their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities seeking to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using savings to manage growing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in southeast England announced its asset disposal plan included the disposal of a retail complex in Rainham and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Broader Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase council taxes next spring to address the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these take time to deliver both improved services and financial savings,” stated a council leader.
He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of regional authorities recently further found council budgets being strained by the increasing figures of children and adults requiring special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) 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 most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The figures highlights the extent of challenges facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study revealed.
