Based on a recent study of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in England stated that 60% of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and open spaces to support their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
The group noted that a significant number of councils seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and utilising financial reserves to weather increasing financial challenges.”
Detailed Cases of Planned Sales
Medway Council in Kent said its property management strategy featured the sale of a retail complex in Rainham and a social club in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all generate rent for the authority, will additionally be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase council taxes next April to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, 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 Vince Maple.
He added: “We face demographic pressures which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities recently further found local finances being stretched by the growing number of young people and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the extent of challenges facing local leaders across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study found.
