According to a new survey of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and land to shore up their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials said they would focus on restructuring services and using financial reserves to manage increasing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in Kent said its property management strategy featured the disposal of a shopping centre in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Financial Pressures
The survey of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of councils will need to increase local levies next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Patterns and Forecasts
A survey of regional authorities this week further found local finances being stretched by the increasing figures of children and older individuals needing Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“While only one key city is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of challenges facing local leaders across major urban centers in the coming year,” the analysis added.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey found.
