Based on a latest survey of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% of councils are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities seeking to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of municipal officials said they would prioritise service redesigns and using savings to weather increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in Kent said its asset disposal plan featured the sale of a shopping centre in a local town and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Strains
The survey of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of councils will need to raise council taxes next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils recently further found local finances being strained by the increasing figures of children and older individuals requiring Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) covering UK local authorities, several key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of challenges facing local leaders across major urban centers in the next twelve months,” the report added.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, 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 past 12 months, the survey found.
