According to a new poll of local authorities, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in England stated that 60% of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and open spaces to support their finances, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a significant number of councils attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would focus on restructuring services and utilising savings to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England announced its property management strategy included the sale of a shopping centre in Rainham and a community venue in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise local levies next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority 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 temporary accommodation.
“We are taking creative strategies but some of these take time to deliver both better provisions and cost efficiency,” stated a council leader.
He added: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Projections
Research of county councils this week also found council budgets being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (IMD) covering English councils, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised care services in the past 12 months, the study found.
