According to a new survey of local authorities, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of councils seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent said its asset disposal plan featured the sale of a shopping centre in a local town and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Rises and Wider Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will need to increase council taxes next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and financial savings,” stated a council leader.
He added: “We face demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Projections
Research of county councils recently further found local finances being strained by the growing number of young people and adults needing Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (IMD) for English councils, many key cities members were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of England. The figures underscores the extent of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the past 12 months, the study found.
