According to a new survey of local authorities, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to support their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England announced its property management strategy featured the sale of a shopping centre in Rainham and a social club in another town to raise £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 sold under the strategy.
Council Tax Increases and Broader Fiscal Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise council taxes next April to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these require time to deliver both improved services and financial savings,” said Vince Maple.
He continued: “There are population challenges which will persist to add to 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.”
Countrywide Trends and Forecasts
Research of regional authorities this week also found council budgets being stretched by the increasing figures of children and older individuals needing special educational assistance.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of difficulties facing municipal officials across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study found.
