Based on a new study 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.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils representing major urban areas in England stated that six out of ten of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and open spaces to support their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to raise money from a quick sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in Kent said its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Financial Strains
The survey of councils in the coalition, which covers several urban centers, further found that over seven in ten of authorities will have to increase council taxes next April to address the growing cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council said it will proceed 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 taking creative strategies but some of these require time to achieve both improved services and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will continue to add to 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 very challenging.”
Countrywide Patterns and Projections
A survey of county councils this week further found council budgets being strained by the growing number of young people and older individuals needing special educational assistance.
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 delayed scheduled changes to the Send system until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (IMD) covering English councils, several participating urban areas were included in the most deprived in England.
- “Member cities 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 in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The figures highlights the scale of challenges confronting local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and demand,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
