Based on a latest survey of municipal councils, English councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling public land and open spaces to support their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a significant number of authorities seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and utilising savings to weather growing financial challenges.”
Specific Examples of Planned Disposals
One local authority in Kent said its property management strategy included the disposal of a shopping centre in Rainham and a community venue in another town to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Increases and Broader Fiscal Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase local levies next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority 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 temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both better provisions and financial savings,” said a council leader.
He continued: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
Research of regional authorities this week also found local finances being strained by the increasing figures of children and older individuals needing Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The data highlights the scale of difficulties facing local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
