According to a recent poll of local authorities, English councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling playing fields and open spaces to support their budgets, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a significant number of authorities attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and using financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in Kent said its property management strategy featured the sale of a retail complex in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Strains
The survey of local authorities in the key cities group, which includes 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 essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these require time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Projections
A survey of county councils recently further found council budgets being strained by the increasing figures of children and adults needing special educational assistance.
The County Councils Network said 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 put off planned reforms to the special educational needs framework until the coming year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“Although only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties confronting local leaders across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and need,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey found.
