According to a new survey of local authorities, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would prioritise service redesigns and utilising financial reserves to weather increasing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in Kent said its asset disposal plan included the disposal of a shopping centre in a local town and a social club in another town to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Broader Fiscal Pressures
The survey of councils in the coalition, which covers several urban centers, also found that more than 70% of authorities will need to increase council taxes next spring to address the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He added: “There are demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of county councils this week further found local finances being stretched by the growing number of children and older individuals needing Send support.
A network of councils said that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The figures underscores the extent of difficulties facing local leaders across major urban centers in the coming year,” the analysis concluded.
“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 demand,” said a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study revealed.
