Based on a new poll of local authorities, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and land to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to weather increasing financial challenges.”
Specific Cases of Planned Sales
One local authority in southeast England said its property management strategy included the disposal of a retail complex in a local town and a social club in Rochester to generate 20 million pounds over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Broader Financial Strains
This research of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will have to increase local levies next April to cover the growing cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these take time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
Research of county councils this week further found local finances being stretched by the increasing figures of young people and adults needing Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, 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 top 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The figures underscores the scale of difficulties confronting local leaders across key cities in the coming year,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.
