According to a new poll of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of local authorities are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and open spaces to support their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of authorities seeking to generate funds from a quick sale of holdings marked “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and using savings to manage growing fiscal pressures.”
Specific Cases of Proposed Disposals
Medway Council in southeast England said its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Rises and Broader Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will have to raise council taxes next April to address the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Projections
A survey of regional authorities this week further found council budgets being stretched by the growing number of young people and adults requiring special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores 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 demand,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
