Based on a new poll of local authorities, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and land to support their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group said that a significant number of authorities seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Proposed Sales
Medway Council in southeast England announced its property management strategy featured the sale of a retail complex in Rainham and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise council taxes next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both improved services and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will continue 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 extremely difficult.”
National Patterns and Projections
Research of regional authorities this week further found local finances being stretched by the increasing figures of young people and older individuals needing Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those changes has been postponed.
Deprivation and Financial Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of challenges facing municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and demand,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study revealed.
