Based on a recent study of local authorities, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling playing fields and land to shore up their budgets, but they contend they must continue 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 assets represented “a clear change from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and using savings to weather increasing fiscal pressures.”
Specific Cases of Planned Disposals
One local authority in southeast England said its property management strategy featured the sale of a shopping centre in a local town and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider Financial Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise local levies next spring to cover the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils this week further found local finances being strained by the increasing figures of young people and adults needing special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the extent of challenges facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and demand,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the last year, the study found.
