According to a latest study 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.
Growing Financial Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for selling public land and land to shore up their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and utilising financial reserves to manage growing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in southeast England announced its asset disposal plan featured the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Strains
The survey of councils in the coalition, which includes several urban centers, further found that over seven in ten of councils will have to increase council taxes next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said 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 adopting creative strategies but some of these take time to deliver both improved services and financial savings,” said Vince Maple.
He added: “There are population challenges which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
Research of county councils this week further found local finances being stretched by the growing number of children and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Deprivation and Financial Gaps
Based on the latest indices of deprivation (IMD) covering English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of challenges facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the study revealed.
