According to a recent survey of local authorities, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to support their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and utilising savings to weather growing fiscal pressures.”
Detailed Cases of Planned Disposals
One local authority in southeast England said its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Broader Financial Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but certain measures take time to achieve both improved services and financial savings,” stated Vince Maple.
He continued: “We face population challenges which will continue 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.”
Countrywide Patterns and Projections
Research of county councils recently further found local finances being stretched by the increasing figures of young people and adults needing special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“While only one key city is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The figures underscores the extent of challenges confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of councils have cut or compromised social care provision in the last year, the survey found.
