According to a latest study of local authorities, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England 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 previously faced criticism for selling playing fields and land to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising savings to weather increasing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent said its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in another town to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Rises and Broader Financial Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase local levies next April to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of regional authorities this week further found local finances being strained by the growing number of young people and older individuals requiring special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures highlights the extent of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and need,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study revealed.
