According to a latest survey of municipal councils, English councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing major urban areas in the UK reported that six out of ten of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and land to support their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition noted that a high proportion of councils attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on restructuring services and utilising savings to weather increasing fiscal pressures.”
Detailed Cases of Proposed Disposals
Medway Council in Kent said its property management strategy featured the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Wider Financial Pressures
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise council taxes next April to address the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of county councils recently further found local finances being stretched by the increasing figures of young people and adults needing special educational assistance.
A network of councils 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 the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (IMD) for English councils, several key cities members were included in the most deprived in England.
- “Participating urban centers 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 report.
“Although only a single urban area is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The figures underscores the scale of challenges confronting municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and need,” stated 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 communities.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
