Based on a latest survey of local authorities, English councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to generate funds from a quick sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and using financial reserves to manage increasing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in Kent said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next April to cover the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
Research of county councils recently further found local finances being strained by the growing number of children and adults requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (IMD) for English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The data underscores the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, 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 revealed.
