According to a new survey of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to support their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of authorities attempting to generate funds from a fire sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and using savings to manage growing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in southeast England announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the strategy.
Council Tax Rises and Wider Financial Pressures
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of councils will have to increase council taxes next April to cover the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will press ahead with property disposals 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 achieve both improved services and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of regional authorities this week further found local finances being strained by the increasing figures of young people and older individuals needing special educational assistance.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Government officials have put off planned reforms to the Send system until next year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (IMD) covering English councils, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures underscores the scale of challenges facing local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and responds to the real levels of disadvantage and demand,” stated a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the study found.
