According to a recent poll of local authorities, English councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling playing fields and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of authorities attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders said they would focus on service redesigns and utilising savings to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
Medway Council in Kent said its property management strategy included the sale of a retail complex in a local town and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise council taxes next April to address the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “There are population challenges which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils this week further found council budgets being strained by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to cope with 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.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (IMD) for English councils, several participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of difficulties facing municipal officials across major urban centers in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the survey revealed.
