Based on a recent survey of local authorities, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% of local authorities are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and open spaces to support their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of councils seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and utilising savings to weather growing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Increases and Broader Fiscal Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise local levies next spring to address the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after sharp increases in the cost of children services, 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 deliver both improved services and financial savings,” stated Vince Maple.
He added: “There are population challenges which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of county councils recently also found local finances being stretched by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” said 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 data underscores the scale of challenges facing local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities 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 last year, the study found.
