According to a latest survey of local authorities, English councils are preparing to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of playing fields and land to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of authorities seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and using savings to manage increasing fiscal pressures.”
Detailed Cases of Planned Disposals
One local authority in Kent said its property management strategy featured the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Broader Fiscal Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise local levies next spring to address the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both improved services and financial savings,” stated a council leader.
He continued: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils recently further found local finances being stretched by the growing number of young people and adults needing Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, 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 white paper setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (IMD) covering English councils, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of challenges confronting local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey found.
