According to a new survey of local authorities, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and open spaces to support their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a high proportion of councils seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in Kent announced its asset disposal plan included 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 commercial properties held in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Broader Financial Pressures
This research of councils in the coalition, which includes several urban centers, also found that over seven in ten of councils will need to increase local levies next April to address the growing cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of regional authorities this week further found local finances being stretched by the increasing figures of young people and adults needing special educational assistance.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of challenges confronting municipal officials across major urban centers in the coming year,” the report added.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the last year, the survey revealed.
