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Based on a recent study of municipal councils, English councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.

Increasing Fiscal Pressures Drive Asset Sales

The Key Cities Group representing major urban areas in the UK stated that six out of ten of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.

Local governments have in the past faced criticism for disposing of playing fields and open spaces to shore up their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.

The group noted that a significant number of authorities attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and using savings to weather increasing fiscal pressures.”

Detailed Examples of Proposed Disposals

One local authority in Kent announced its property management strategy included the sale of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.

• A local golf course and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.

Local Levy Increases and Wider Fiscal Strains

This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to increase council taxes next spring to address the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.

The authority explained it will press ahead with property disposals 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 certain measures take time to deliver both better provisions and financial savings,” stated Vince Maple.

He added: “We face demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”

National Patterns and Projections

A survey of regional authorities this week also found council budgets being stretched by the increasing figures of children and older individuals needing special educational assistance.

The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.

Government officials have put off scheduled changes to the Send system until the coming year after a policy document outlining those reforms has been postponed.

Disadvantage and Funding Shortfalls

Based on the latest deprivation measures (IMD) covering English councils, many participating urban areas were among the most deprived in the country.

• “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” said the report.

“Although only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis added.

“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and need,” stated a council leader.

“Without this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”

A fifth of local authorities have reduced or weakened care services in the last year, the study found.