According to a latest poll of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of public land and open spaces to shore up their budgets, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of authorities seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and utilising financial reserves to weather increasing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent said its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to generate 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Rises and Broader Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase local levies next April to address the growing cost of essential services, increased rates 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, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both improved services and financial savings,” stated a council leader.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities recently also found local finances being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper outlining those reforms has been postponed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” noted the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of England. The figures highlights the scale of challenges confronting municipal officials across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the last year, the survey found.
