Based on a new study of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and open spaces to support their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to raise money from a quick sale of holdings represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and using savings to manage growing fiscal pressures.”
Detailed Cases of Proposed Disposals
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Rises and Wider Financial Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise local levies next spring to address the rising cost of core provisions, higher levels 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, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of county councils this week also found council budgets being strained by the increasing figures of young people and older individuals requiring Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent deprivation measures (IMD) covering UK local authorities, many participating urban areas were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties confronting municipal officials across major urban centers in the coming year,” the report added.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and need,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the last year, the study revealed.
