Based on a recent study of local authorities, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and land to shore up their finances, but they contend they must continue to raise vital cash from property disposals or face insolvency.
The group said that a significant number of authorities seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in Kent said its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over five years.
- A local golf course and business parks held in two English counties, which all generate rent for the authority, will additionally be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Pressures
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will persist to add to 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 Projections
A survey of county councils this week further found local finances being stretched by the increasing figures of children and older individuals needing Send support.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (IMD) covering English councils, many key cities members were included in the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The data highlights the extent of challenges facing municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and need,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the last year, the study revealed.
