Based on a recent poll of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a high proportion of authorities seeking to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and using financial reserves to weather increasing fiscal pressures.”
Specific Cases of Planned Disposals
One local authority in southeast England announced its property management strategy featured the disposal of a shopping centre in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Pressures
This research 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 increase local levies next spring to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils recently further found local finances being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the Send system until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering 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 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the scale of challenges facing municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study found.
