According to a new poll of local authorities, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in the UK reported that six out of ten of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of playing fields and open spaces to shore up their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its property management strategy featured the sale of a shopping centre in a local town and a social club in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Local Levy Increases and Wider Financial Strains
The survey of councils in the coalition, which covers several urban centers, further 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 steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He continued: “We face demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Projections
Research of regional authorities recently also found council budgets being strained by the growing number of young people and adults requiring Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey found.
