According to a new survey of local authorities, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling public land and land to shore up their budgets, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would focus on restructuring services and utilising financial reserves to weather increasing financial challenges.”
Specific Examples of Planned Sales
One local authority in Kent announced its property management strategy included the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the strategy.
Council Tax Increases and Broader Fiscal 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 cover the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures require time to achieve both improved services and cost efficiency,” said a council leader.
He added: “There are population challenges which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
Research of county councils this week further found council budgets being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the latest indices of deprivation (IMD) for UK local authorities, several participating urban areas were included in the most deprived in the country.
- “Member cities 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 in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of challenges facing municipal officials across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.
