According to a latest poll of local authorities, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of councils are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of playing fields and land to support their finances, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and using savings to weather increasing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre in Rainham 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 also be disposed of under the plan.
Council Tax Increases and Broader Fiscal Strains
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase local levies next spring to address the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both better provisions and financial savings,” said a council leader.
He added: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils recently further found local finances being stretched by the growing number of young people and older individuals needing Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a policy document outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the scale of challenges facing local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of deprivation and demand,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey found.
