According to a latest survey of local authorities, English councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to support their budgets, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition said that a high proportion of councils seeking to generate funds from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising savings to weather growing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in Kent announced its property management strategy featured the disposal of a shopping centre in a local town and a community venue in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase council taxes next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “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 revenue support grant from over the past decade, which is very challenging.”
National Trends and Projections
Research of regional authorities recently further found local finances being strained by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of difficulties facing local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and need,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study found.
