Based on a new survey of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for major urban areas in England stated that six out of ten of local authorities are intending to sell assets to meet the rising 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 finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of authorities attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and using financial reserves to weather increasing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in Kent said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to generate 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase council taxes next April to address the rising cost of essential services, increased rates of homelessness, and a persistent housing shortage.
The authority said it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these require time to achieve both improved services and financial savings,” said Vince Maple.
He added: “There are population challenges 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 extremely difficult.”
National Trends and Forecasts
Research of county councils recently also found council budgets being stretched by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most deprived in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the study.
“While only one key city is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study found.
