Based on a latest poll of local authorities, English councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling public land and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of authorities attempting to raise money from a fire sale of assets represented “a distinct shift 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
One local authority in Kent said its asset disposal plan included the disposal of a retail complex in Rainham and a social club in Rochester to raise 20 million pounds over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Wider Financial 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 need to raise council taxes next April to address the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed 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 adopting creative strategies but some of these require time to achieve both improved services and financial savings,” stated a council leader.
He added: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found local finances being stretched by the increasing figures of children and older individuals requiring Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers 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 most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of difficulties facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials 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,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the last year, the survey found.
