According to a new study of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Increasing Fiscal 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 rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and using financial reserves to weather increasing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its property management strategy featured the disposal of a retail complex in Rainham and a social club in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise council taxes next April to cover the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these take time to achieve both better provisions and financial savings,” said a council leader.
He continued: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Projections
Research of regional authorities this week also found local finances being stretched by the increasing figures of children and adults needing Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and demand,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study found.
