Based on a new survey of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for major urban areas in the UK stated that 60% of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and land to support their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and utilising savings to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in southeast England said its property management strategy included the disposal of a retail complex in a local town and a community venue in Rochester to generate 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will have to increase council taxes next April to cover 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 steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Trends and Projections
A survey of county councils recently further found council budgets being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of challenges confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of deprivation and demand,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
