Based on a latest poll of local authorities, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of councils are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on restructuring services and utilising financial reserves to weather increasing financial challenges.”
Specific Examples of Planned Sales
One local authority in Kent announced its property management strategy featured the sale of a retail complex in a local town and a social club in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Rises and Broader Financial Strains
The survey of councils in the key cities group, which covers several urban centers, further found that over seven in ten of councils will have to increase council taxes next April to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of regional authorities recently also found local finances being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the Send system until next year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the scale of challenges confronting local leaders across key cities in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey found.
