According to a new study of local authorities, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of local authorities are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of playing fields and land to support their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would focus on restructuring services and using savings to weather growing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its property management strategy included the sale of a retail complex in a local town and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Wider Fiscal Strains
The survey of councils in the coalition, which includes several urban centers, further found that over seven in ten of councils will need to raise council taxes next April to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council said it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of regional authorities this week also found local finances being stretched by the increasing figures of young people and older individuals needing Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, 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 most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of challenges confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the study revealed.
