According to a new poll of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in England reported that six out of ten of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling public land and open spaces to support their finances, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and utilising savings to weather growing financial challenges.”
Specific Examples of Planned Sales
One local authority in Kent said its property management strategy included the sale of a retail complex in a local town and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Financial Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to achieve both improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities recently further found local finances being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (IMD) for UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of the nation. The figures highlights the scale of challenges confronting municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.
“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 local authorities have cut or compromised care services in the past 12 months, the study revealed.
