According to a latest survey of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of playing fields and land to support their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
This coalition said that a significant number of councils seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Specific Examples of Proposed Sales
Medway Council in Kent said its property management strategy featured the sale of a shopping centre in Rainham and a community venue in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase local levies next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to deliver both improved services and financial savings,” said Vince Maple.
He added: “We face 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 extremely difficult.”
Countrywide Patterns and Projections
Research of county councils this week also found council budgets being stretched by the increasing figures of children and older individuals requiring Send support.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Gaps
According to the latest indices of deprivation (IMD) covering English councils, several key cities members were among the most deprived in England.
- “Member cities like several major towns place in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and demand,” stated a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the past 12 months, the survey revealed.
