Based on a recent survey of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of public land and open spaces to support their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a quick sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in Kent said its property management strategy included the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Broader Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise local levies next April to address the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these require time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities recently further found council budgets being stretched by the increasing figures of young people and older individuals needing special educational assistance.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties confronting local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” stated a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study found.
