Based on a recent survey of local authorities, English councils are preparing to sell 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
The Key Cities Group representing major urban areas in the UK reported that six out of ten of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and open spaces to support their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and using savings to weather increasing fiscal pressures.”
Detailed Cases of Proposed Sales
Medway Council 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 generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Rises and Wider Financial Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase council taxes next April to address the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both better provisions and financial savings,” stated Vince Maple.
He continued: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities this week further found council budgets being stretched by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off scheduled changes to the Send system until next year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” said the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties confronting municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study found.
