According to a recent survey of local authorities, English councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group said that a high proportion of authorities attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and utilising savings to manage growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in southeast England said its property management strategy included 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 Medway council, will additionally be sold under the strategy.
Council Tax Rises and Wider Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next April to address the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, 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 achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Patterns and Forecasts
A survey of regional authorities this week further found local finances being stretched by the growing number of children and older individuals requiring Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (IMD) covering English councils, several key cities members were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of England. The data highlights the scale of challenges facing local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the last year, the survey found.
