Based on a recent study of local authorities, English councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of local authorities are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling public land and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of authorities seeking to generate funds from a quick sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and using savings to manage growing financial challenges.”
Specific Cases of Planned Sales
One local authority in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Increases and Wider Financial Strains
The survey of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of authorities will have to raise local levies next April to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these take time to achieve both improved services and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
A survey of regional authorities recently also found local finances being stretched by the growing number of children and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Shortfalls
According to the most recent deprivation measures (IMD) 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 place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only one key city is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of challenges confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and demand,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
