According to a recent survey of municipal councils, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and land to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of authorities seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would prioritise restructuring services and using savings to weather growing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in Kent said its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to generate £20m 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 Financial Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase local levies next April to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of regional authorities recently further found council budgets being stretched by the growing number of children and adults needing Send support.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (IMD) covering English councils, several key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of difficulties facing local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for 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 fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the last year, the survey found.
