According to a recent survey of local authorities, English councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling playing fields and open spaces to support their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group 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 majority (six in ten) of local leaders said they would focus on restructuring services and using savings to manage increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in another town to raise 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Increases and Broader Financial Pressures
The survey of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of councils will have to raise local levies next April to address the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both better provisions and financial savings,” said a council leader.
He continued: “There are population challenges which will continue to add to the strains 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 Trends and Forecasts
Research of regional authorities this week also found council budgets being strained by the increasing figures of children and adults needing special educational assistance.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (IMD) covering UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of England. The data highlights the scale of difficulties facing municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the survey revealed.
