Based on a recent poll of local authorities, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that 60% of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of councils attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and utilising savings to manage increasing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre in Rainham and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Increases and Wider Fiscal Strains
The survey of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of councils will need to increase council taxes next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures take time to achieve both improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Projections
A survey of county councils recently also found council budgets being strained by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and demand,” stated a council leader.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the survey revealed.
