Based on a latest study of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land to support their finances, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and using financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in southeast England said its asset disposal plan featured the sale of a retail complex in Rainham and a social club in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Pressures
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
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 creative strategies but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of county councils recently also found council budgets being stretched by the increasing figures of young people and adults requiring Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The data highlights the scale of challenges confronting municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study found.
