Based on a new survey of local authorities, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England reported that 60% of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of councils attempting to generate funds from a fire sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and utilising savings to manage growing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in Kent said its property management strategy featured the sale of a retail complex in a local town and a social club in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Pressures
This research of councils in the coalition, which includes several urban centers, further found that over seven in ten of authorities will have to raise council taxes next spring to address the growing cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “We face population challenges which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently further found council budgets being stretched by the increasing figures of children and older individuals needing special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) for UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of difficulties confronting local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and need,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study found.
