According to a new poll 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 balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils for major urban areas in England reported that six out of ten of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and open spaces to support their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and using savings to weather increasing fiscal pressures.”
Specific Examples of Proposed Sales
Medway Council in Kent announced its property management strategy featured the disposal of a shopping centre in Rainham and a social club in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the plan.
Council Tax Increases and Broader Financial Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase local levies next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of regional authorities this week further found local finances being stretched by the growing number of children and adults needing Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the Send system until next year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (IMD) for UK local authorities, several participating urban areas were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties facing municipal officials across major urban centers in the coming year,” the report added.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and demand,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened care services in the last year, the survey revealed.
