Based on a latest study of local authorities, English councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and open spaces to support their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and utilising savings to manage growing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in southeast England said its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in another town to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Broader Financial Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to raise council taxes next spring to address the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “There are population challenges which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Projections
Research of county councils this week also found local finances being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (IMD) for English councils, many participating urban areas were among the most deprived in England.
- “Member cities like several major towns place in the top 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The data underscores the extent of difficulties facing local leaders across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the survey revealed.
