According to a latest poll of local authorities, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and open spaces to support their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and using savings to weather increasing financial challenges.”
Specific Cases of Proposed Disposals
One local authority in southeast England said its property management strategy featured the sale of a shopping centre in Rainham and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase local levies next April to cover the growing cost of core provisions, increased rates of homelessness, 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, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures take time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
A survey of county councils this week further found council budgets being strained by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils said that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The data underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study found.
