According to a latest poll of local authorities, English councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling public land and land to shore up their finances, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and utilising savings to weather growing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in Kent said its asset disposal plan included the sale of a retail complex in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will additionally be sold under the strategy.
Council Tax Rises and Wider Fiscal Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise local levies next April to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
A survey of county councils this week further found local finances being stretched by the growing number of young people and older individuals needing Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” noted the report.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of England. The figures underscores the scale of difficulties facing municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and need,” stated a council leader.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study found.
