According to a latest study of local authorities, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of councils are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling public land and open spaces to shore up their finances, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and utilising savings to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of local authorities in the coalition, which includes several urban centers, also found that over seven in ten of councils will need to increase council taxes next April to address the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead 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 achieve both improved services and financial savings,” said a council leader.
He added: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils recently also found local finances being strained by the increasing figures of children and older individuals needing Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off planned reforms to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of challenges facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the study found.
