Based on a new study of local authorities, English councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of councils are planning to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling public land and open spaces to support their finances, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils seeking 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 increasing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in Kent said its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Rises and Wider Financial Strains
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise local levies next spring to cover the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures require time to deliver both better provisions and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities recently also found local finances being stretched by the growing number of young people and adults needing Send support.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of England. The figures highlights the scale of challenges confronting local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and responds to the real levels of disadvantage and need,” said a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the study revealed.
