According to a latest survey of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and open spaces to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of authorities attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and using savings to manage increasing financial challenges.”
Specific Examples of Planned Sales
Medway Council in Kent said its asset disposal plan included the disposal of a retail complex in a local town and a community venue in another town to raise £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Rises and Wider Financial Strains
This research 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 address the growing cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these require time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently also found local finances being stretched by the increasing figures of children and adults needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off planned reforms to the Send system until next year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study revealed.
