According to a new study of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of local authorities are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and land to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a significant number of councils attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and utilising savings to manage growing financial challenges.”
Specific Examples of Planned Disposals
One local authority in Kent said its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- 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 Rises and Wider Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to raise council taxes next April to cover the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of county councils this week also found council budgets being strained by the increasing figures of children and older individuals needing Send support.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” said the study.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The data highlights the extent of challenges facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study revealed.
