Based on a new study of municipal councils, English councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for major urban areas in England reported that 60% of local authorities are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling public land and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in Kent said its asset disposal plan included the sale of a shopping centre in Rainham and a social club in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Rises and Broader Fiscal Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise council taxes next spring to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities recently also found local finances being stretched by the growing number of children and adults needing special educational assistance.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Gaps
According to the most recent deprivation measures (IMD) for UK local authorities, many participating urban areas were included in the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the extent of challenges facing local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey found.
