According to a recent study of local authorities, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and open spaces to support their finances, but they contend they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a significant number of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in Kent announced 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 five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Rises and Wider Fiscal Strains
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 raise local levies next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will persist to add to the strains 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.”
Countrywide Trends and Forecasts
Research of county councils this week also found council budgets being stretched by the increasing figures of young people and adults requiring special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, 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.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (IMD) for English councils, several participating urban areas were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the study.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of challenges facing municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the study found.
