Based on a new study of local authorities, English councils are preparing to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and open spaces to support their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Detailed Cases of Proposed Sales
Medway Council in Kent said its asset disposal plan included the disposal of a retail complex in Rainham and a social club in another town to generate £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Local Levy Rises and Broader Financial Strains
The survey of councils in the coalition, which covers several urban centers, also found that over seven in ten of authorities will have to increase council taxes next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “We face population challenges which will continue to add to the pressures 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.”
National Trends and Projections
Research of county councils this week further found council budgets being strained by the growing number of young people and adults requiring Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” said the report.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been clear about the need for a equitable and lasting funding system that reflects and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
