According to a recent poll of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”
Specific Cases of Planned Disposals
Medway Council in southeast England announced its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Increases and Broader Financial Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase council taxes next spring to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to achieve both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities this week also found council budgets being strained by the increasing figures of children and older individuals needing special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (IMD) for English councils, many participating urban areas were included in the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the scale of challenges facing municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised care services in the last year, the survey found.
