According to a new survey of municipal councils, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of local authorities are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling public land and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to weather growing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in southeast England said its property management strategy included the disposal of a retail complex in a local town and a community venue in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Increases and Broader Fiscal Pressures
The survey of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of councils will need to increase council taxes next spring to address the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face demographic pressures which will persist 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 extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils recently also found council budgets being strained by the increasing figures of young people and older individuals needing Send support.
A network of councils projected that local shortfalls 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 special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The figures highlights the extent of difficulties facing municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the survey found.
