Based on a latest survey of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in England reported that six out of ten of local authorities are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales 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 distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and using financial reserves to manage growing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in Kent announced its asset disposal plan included the sale of a retail complex in Rainham and a social club in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Wider Financial Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise council taxes next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “There are population challenges which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils this week further found local finances being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey found.
