Based on a latest survey of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in the UK stated that six out of ten of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and land to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and utilising financial reserves to weather increasing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Rises and Broader Fiscal Pressures
This research of local authorities in the coalition, which includes several urban centers, also found that more than 70% of councils will need to raise local levies next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, 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 a council leader.
He added: “We face population challenges which will persist to increase 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.”
National Trends and Forecasts
Research of county councils recently further found local finances being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most deprived in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest deprivation indices,” noted the report.
“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 the nation. The figures highlights the scale of challenges facing local leaders across major urban centers in the coming year,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, 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 survey revealed.
