Based on a latest survey of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in the UK reported that six out of ten of councils are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of public land and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would prioritise restructuring services and using financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Planned Sales
Medway Council in Kent said its asset disposal plan included the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Council Tax Rises and Wider Fiscal Strains
The survey of councils 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 core provisions, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Forecasts
A survey of regional authorities recently also found local finances being stretched by the growing number of children and adults requiring Send support.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” said the report.
“While only one key city is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of challenges facing municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and demand,” stated a council leader.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study revealed.
