Based on a latest survey of local authorities, English councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and land to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising savings to manage increasing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in Kent said its property management strategy included the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Rises and Wider Financial Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next spring to address the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals 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 adopting creative strategies but some of these take time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of regional authorities recently further found council budgets being strained by the growing number of young people and adults 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 cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Gaps
According to the latest 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 place in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the extent of challenges confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the study revealed.
