According to a latest poll of local authorities, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England reported that 60% of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and land to support their finances, but they argue they must proceed to generate essential revenue 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 local leaders said they would prioritise restructuring services and utilising financial reserves to weather increasing financial challenges.”
Specific Cases of Proposed Sales
Medway Council in Kent said its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in another town to generate 20 million pounds over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Increases and Wider Financial Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will proceed 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 innovative approaches but some of these take time to achieve both improved services and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Projections
A survey of regional authorities this week also found local finances being stretched by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the most recent deprivation measures (IMD) covering English councils, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The figures underscores the extent of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the last year, the study found.
