Based on a latest survey of local authorities, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and open spaces to support their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of councils attempting to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would prioritise service redesigns and utilising savings to weather growing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in southeast England said its property management strategy featured the sale of a shopping centre in Rainham and a social club in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Wider Fiscal Pressures
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise local levies next April to cover the growing cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales 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 creative strategies but certain measures require time to deliver both improved services and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will persist to increase the pressures 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 Patterns and Projections
A survey of county councils recently further found local finances being stretched by the increasing figures of children 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 delayed planned reforms to the Send system until next year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The figures underscores the scale of challenges confronting municipal officials across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey found.
