According to a recent survey of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and open spaces to support their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of authorities attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would prioritise restructuring services and using savings to weather growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in Kent announced its property management strategy featured the sale of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for the authority, will additionally be disposed of under the strategy.
Local Levy Increases and Wider Financial Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next spring to address the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
Research of county councils recently also found local finances being strained by the increasing figures of young people and older individuals needing special educational assistance.
A network of councils projected 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 put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (IMD) for English councils, several key cities members were among 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 nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of challenges facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the last year, the survey revealed.
