🔗 Share this article

According to a new poll of municipal councils, English councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.

Growing Financial Challenges Prompt Asset Sales

The Key Cities Group representing major urban areas in the UK reported that six out of ten of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.

Councils have previously faced criticism for disposing of public land and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.

The group said that a significant number of councils attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise service redesigns and utilising financial reserves to weather increasing fiscal pressures.”

Specific Cases of Proposed Disposals

Medway Council in southeast England said its asset disposal plan included the disposal of a retail complex in Rainham and a social club 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 strategy.

Local Levy Increases and Broader Financial Strains

This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise local levies next April to address the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.

Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.

“We are adopting innovative approaches but certain measures take time to deliver both improved services and financial savings,” stated a council leader.

He continued: “We face demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”

Countrywide Patterns and Projections

A survey of regional authorities this week also found local finances being stretched by the increasing figures of children and adults requiring special educational assistance.

The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.

Government officials have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms has been postponed.

Deprivation and Financial Shortfalls

According to the latest indices of deprivation (IMD) for English councils, many participating urban areas were among the most disadvantaged in the country.

• “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the study.

“While only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The figures underscores the extent of challenges facing local leaders across major urban centers in the coming year,” the report concluded.

“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and need,” stated Michael Mordey.

“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”

A fifth of local authorities have cut or compromised care services in the past 12 months, the survey revealed.