Based on a new poll of municipal councils, English councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition noted 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 (six in ten) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”
Specific Examples of Proposed Sales
One local authority in Kent announced its property management strategy featured the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which includes several urban centers, also found that over seven in ten of authorities will have to increase council taxes next April to address the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
Research of county councils recently also found local finances being stretched by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (IMD) for UK local authorities, many key cities members were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“While only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The figures highlights the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study revealed.
