Based on a latest survey of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to support 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 raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would prioritise restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in Kent announced its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Financial Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise local levies next spring to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
Research of county councils recently also found local finances being stretched by the increasing figures of children and older individuals needing Send support.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a white paper outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (IMD) covering English councils, several participating urban areas were among the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the study found.
