Based on a latest poll of municipal councils, English councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing major urban areas in the UK reported that six out of ten of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and land to support their budgets, 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 distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and utilising financial reserves to manage growing fiscal pressures.”
Specific Cases of Proposed Sales
Medway Council in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Wider Financial Strains
The survey of councils in the key cities group, which includes several urban centers, further found that over seven in ten of councils will need to increase council taxes next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently further found local finances being stretched by the increasing figures of young people and adults needing Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of challenges confronting municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study found.
