According to a latest survey of local authorities, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of councils are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of authorities attempting to raise money from a fire sale of holdings 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 financial reserves to weather growing financial challenges.”
Specific Examples of Proposed Sales
One local authority in Kent said its property management strategy featured the disposal of a shopping centre in Rainham and a social club in another town to raise 20 million pounds over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Council Tax Rises and Wider Fiscal Strains
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase local levies next April to cover the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” stated a council leader.
He added: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently further found council budgets being stretched by the increasing figures of children and adults needing special educational assistance.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“Although only one key city is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the extent of difficulties facing local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study found.
