Based on a new survey of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of councils seeking to raise money 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 using savings to weather increasing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in Kent announced its asset disposal plan featured the sale of a retail complex in a local town and a social club 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 plan.
Council Tax Increases and Broader Financial Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to increase council taxes next spring to address the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority explained 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 short-term housing.
“We are adopting innovative approaches but some of these require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “We face population challenges which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
A survey of county councils this week further found council budgets being stretched by the growing number of young people and older individuals requiring special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Gaps
According to the latest deprivation measures (IMD) for English councils, several key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the extent of difficulties confronting local leaders across major urban centers in the coming year,” the report added.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and need,” stated a council leader.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study revealed.
