Based on a new poll of local authorities, English councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and land to shore up their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on restructuring services and using financial reserves to weather increasing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent announced its property management strategy included the disposal of a shopping centre in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise council taxes next April to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both improved services and financial savings,” stated a council leader.
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 2010-24, which is very challenging.”
National Trends and Forecasts
Research of county councils recently further found council budgets being stretched by the increasing figures of children and older individuals needing special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (IMD) covering English councils, several key cities members were among the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of England. The data highlights the extent of challenges facing municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that reflects and addresses the actual extent of deprivation and demand,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey found.
