Based on a recent study of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of councils are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their budgets, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
The group noted that a high proportion of councils attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and using financial reserves to manage growing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in southeast England said its property management strategy included the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Increases and Wider Fiscal Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise local levies next April to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
Research of county councils recently also found local finances being stretched by the increasing figures of children and older individuals needing special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” said the study.
“While only one key city is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges confronting local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and need,” said a council leader.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey found.
