Based on a new study of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of local authorities are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and land to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a significant number of councils attempting to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and utilising savings to manage increasing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in Kent announced its property management strategy featured the sale of a shopping centre in a local town and a social club in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Rises and Wider Financial Strains
This research of councils in the coalition, which covers several urban centers, also found that over seven in ten of authorities will need to increase local levies next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of regional authorities this week further found local finances being strained by the growing number of children and adults needing Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) for UK local authorities, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the scale of challenges confronting local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and need,” stated a council leader.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey found.
