🔗 Share this article

Based on a new study of local authorities, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to stabilize finances.

Growing Fiscal Challenges Prompt Asset Sales

A coalition of councils for second-tier cities in England reported that six out of ten of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.

Local governments have previously faced criticism for selling public land and open spaces to shore up their finances, 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 councils seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and utilising financial reserves to manage growing fiscal pressures.”

Detailed Examples of Proposed Disposals

Medway Council in Kent said its asset disposal plan 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 business parks owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.

Local Levy Rises and Wider Fiscal Pressures

The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to raise council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.

Medway council said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.

“We are taking innovative approaches but some of these require time to deliver both better provisions and financial savings,” said Vince Maple.

He continued: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”

Countrywide Patterns and Forecasts

Research of county councils recently also found local finances being stretched by the growing number of young people and older individuals needing Send support.

The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to manage rising needs.

Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.

Disadvantage and Financial Gaps

According to the latest indices of deprivation (IMD) for English councils, many key cities members were among the most deprived in the country.

• “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.

“Although only one key city is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of challenges confronting municipal officials across major urban centers in the next twelve months,” the report concluded.

“Council officials have been clear about the need for a equitable and lasting funding system that reflects and addresses the real levels of disadvantage and need,” said Michael Mordey.

“Lacking 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 care services in the last year, the survey found.