Based on a new study of municipal councils, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of local authorities are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and land to support their budgets, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of councils attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in Kent announced its property management strategy included the sale of a retail complex in Rainham and a social club in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Local Levy Rises and Wider Fiscal Pressures
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase council taxes next spring to cover the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will continue to add to 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 very challenging.”
Countrywide Trends and Forecasts
Research of regional authorities this week further found local finances being stretched by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“While only one key city is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of challenges confronting local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and need,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the last year, the survey revealed.
