Based on a new survey of local authorities, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of councils are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils 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 property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would focus on restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
Medway Council in Kent said its property management strategy featured the disposal of a shopping centre in a local town and a community venue in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Wider Fiscal Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that over seven in ten of councils will need to raise council taxes next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures take time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of regional authorities this week also found local finances being stretched by the growing number of children and older individuals requiring Send support.
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.
Government officials have delayed planned reforms to the Send system until next year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (IMD) covering UK local authorities, many participating urban areas were among the most deprived in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the extent of challenges facing municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study revealed.