Based on a recent poll of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of playing fields and land to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and utilising savings to manage growing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in Kent said its asset disposal plan included the sale of a retail complex in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Pressures
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase local levies next April to address the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority said it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both better provisions and cost efficiency,” stated a council leader.
He added: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of county councils this week also found council budgets being stretched by the increasing figures of children and older individuals needing Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (IMD) covering English councils, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The figures underscores the extent of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
