Based on a recent survey of local authorities, English councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils representing major urban areas in England stated that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past 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 high proportion of authorities attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and using savings to manage growing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in Kent said its property management strategy included the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Broader Financial Pressures
This research of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of authorities will need to increase council taxes next spring to address the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and financial savings,” stated Vince Maple.
He continued: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of county councils this week further found local finances being stretched by the increasing figures of children and adults needing Send support.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The figures underscores the scale of challenges facing municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study revealed.
