According to a recent study of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK reported that six out of ten of local authorities are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of public land and open spaces to support their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to weather increasing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in Kent announced its property management strategy included the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise local levies next spring to address the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained 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 temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found local finances being stretched by the growing number of children and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a policy document outlining those changes has been postponed.
Deprivation and Funding Shortfalls
According to the most recent deprivation measures (IMD) covering UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the latest deprivation indices,” said the study.
“Although only one key city is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the scale of challenges confronting local leaders across major urban centers 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 reflects and addresses the real levels of deprivation and need,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study revealed.
