Based on a latest study of local authorities, English councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils for major urban areas in England reported that 60% of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to support their budgets, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to raise money from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England announced its property management strategy included the sale of a retail complex in Rainham and a social club in another town to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise council taxes next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead 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 taking creative strategies but certain measures require time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will continue to add to the strains 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.”
Countrywide Trends and Projections
Research of county councils this week further found local finances being strained by the growing number of children and adults needing Send support.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper outlining those changes has been postponed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Council officials have been clear about the need for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study revealed.
