Based on a new poll of municipal councils, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of public land and land to support their finances, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of councils attempting to raise money from a quick sale of holdings represented “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and utilising financial reserves to manage growing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in southeast England said its property management strategy featured the disposal of a retail complex in a local town and a social club in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Local Levy 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 need to raise local levies next spring to address the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but certain measures take time to deliver both improved services and financial savings,” stated Vince Maple.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils recently further found council budgets being strained by the growing number of children and adults 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 delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in 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,” noted the report.
“Although only one key city is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of challenges facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
