Based on a latest survey of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group for major urban areas in England reported that six out of ten of local authorities are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of public land and land to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and using financial reserves to weather growing financial challenges.”
Detailed Cases of Proposed Disposals
Medway Council in southeast England said its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Wider Fiscal Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise local levies next April to cover the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face 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 Forecasts
A survey of regional authorities recently further found council budgets being strained by the growing number of young people and older individuals needing 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 rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (IMD) covering 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 top 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The figures underscores the scale of challenges confronting local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
