According to a new poll of local authorities, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of playing fields and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number 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 local leaders stated they would prioritise service redesigns and using financial reserves to manage growing financial challenges.”
Detailed Examples of Planned Sales
One local authority in Kent said its property management strategy included the sale of a retail complex in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise council taxes next April to cover the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, 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 continued: “There are population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities this week further found local finances being strained by the growing number of young people and adults needing special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (IMD) for English councils, many participating urban areas were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the scale of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study found.
