Based on a new poll of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and open spaces to support their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and utilising savings to weather increasing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in Kent said its property management strategy featured the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to raise council taxes next spring to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead 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 innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities this week further found local finances being strained by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” noted the report.
“While only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the survey found.
