According to a recent survey of local authorities, English councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and land to support their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of councils attempting to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Detailed Cases of Planned Sales
Medway Council in southeast England said its asset disposal plan featured the sale of a retail complex in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Council Tax Increases and Wider Financial Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “We face population challenges which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
Research of regional authorities this week also found local finances being strained by the increasing figures of young people and adults needing Send support.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (IMD) for UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of difficulties facing municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the last year, the study revealed.
