According to a latest poll of municipal councils, English councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and open spaces to support their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
The group noted that a high proportion of authorities seeking to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in southeast England announced its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will additionally be sold under the strategy.
Council Tax Increases and Wider Fiscal Strains
The survey 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 have to increase council taxes next April to address the rising cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained 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 adopting creative strategies but some of these take time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will continue to increase 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 Projections
A survey of regional authorities this week further found council budgets being strained by the growing number of young people and adults needing special educational assistance.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Ministers have put off planned reforms to the Send system until next year after a white paper setting out those changes has been postponed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (IMD) covering UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The figures underscores the scale of challenges confronting local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and need,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study revealed.
