Based on a recent study of local authorities, English councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of councils are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and land to support their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and using financial reserves to manage growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its property management strategy featured the sale of a shopping centre in a local town and a social club in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Increases and Broader Fiscal Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that more than 70% of authorities will have to increase local levies next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
Research of county councils this week further found council budgets being stretched by the growing number of children and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) for English councils, many key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the scale of challenges facing municipal officials across key cities in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the last year, the survey revealed.
