According to a new study of local authorities, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for major urban areas in England reported that six out of ten of local authorities are intending 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 proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and using savings to manage increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in southeast England said its asset disposal plan included the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase council taxes next April to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities this week also found council budgets being strained by the increasing figures of young people and adults needing Send support.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Government officials 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 Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, 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 analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study revealed.
