According to a latest study of municipal councils, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and land to support their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of authorities seeking to generate funds from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and utilising savings to weather growing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in southeast England said its property management strategy featured the disposal of a retail complex in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Wider Fiscal Pressures
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise local levies next April to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals 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 adopting innovative approaches but some of these take time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “We face population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities recently also found council budgets being strained by the increasing figures of young people and adults requiring Send support.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a white paper outlining those changes has been postponed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of challenges confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the last year, the survey found.
