Based on a latest study of local authorities, English councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of councils are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land to support their finances, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
The group noted that a high proportion of councils seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and using savings to weather increasing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in Kent announced its property management strategy included the disposal of a retail complex 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 the authority, will also be sold under the plan.
Local Levy Increases and Wider Financial Strains
The survey of councils in the key cities group, which includes several urban centers, also found that more than 70% of authorities will have to increase local levies next April to address the rising cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils recently also found local finances being strained by the growing number of young people and older individuals needing Send support.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, several key cities members were among the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The figures highlights the scale of challenges confronting municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the last year, the study revealed.
