According to a recent survey of municipal councils, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of local authorities are planning to dispose of properties to meet the rising 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 proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and using savings to weather increasing financial challenges.”
Specific Cases of Proposed Disposals
One local authority in southeast England announced its property management strategy included the sale of a retail complex 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 generate rent for Medway council, will also be sold under the strategy.
Local Levy Increases and Broader Fiscal Strains
The survey of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of authorities will need to raise council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with property disposals 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 certain measures take time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
Research of regional authorities recently also found council budgets being strained by the growing number of children and older individuals requiring Send support.
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 delayed planned reforms to the special educational needs framework until next year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (IMD) for UK local authorities, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures highlights the extent of challenges facing local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and demand,” said a council leader.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the survey found.
