Based on a new survey of local authorities, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and land to support their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to generate funds from a fire sale of holdings marked “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and using financial reserves to weather increasing financial challenges.”
Specific Cases of Proposed Sales
One local authority in Kent said its asset disposal plan featured the sale of a retail complex in Rainham and a social club in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also 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 authorities will need to increase local levies next spring to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and financial savings,” said a council leader.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils recently also found local finances being strained by the increasing figures of children and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have put off planned reforms to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most deprived in England.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” said the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of challenges confronting local leaders across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the survey revealed.
