Based on a new survey of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of public land and open spaces to support their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Planned Sales
Medway Council in Kent announced its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Increases and Wider Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase local levies next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities this week further found council budgets being strained by the growing number of young people and adults needing Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off scheduled changes to the special educational needs framework until next year after a white paper outlining those changes has been postponed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey found.
