According to a new survey of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK stated that 60% of local authorities are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and land to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and using financial reserves to weather growing financial challenges.”
Specific Examples of Planned Disposals
One local authority in Kent said its property management strategy featured the sale of a retail complex in Rainham and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for the authority, will additionally be sold under the strategy.
Local Levy Rises and Wider Fiscal Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise local levies next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures take time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “We face population challenges which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of regional authorities recently further found council budgets being strained by the increasing figures of young people and adults requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with rising needs.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (IMD) covering English councils, several participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and need,” stated a council leader.
“Without this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.
