Based on a new study of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and open spaces to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of councils attempting to generate funds from a quick sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and using financial reserves to manage growing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in Kent said its property management strategy included the disposal of a retail complex in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Increases and Wider Fiscal Pressures
The survey of councils in the coalition, which includes several urban centers, also found that more than 70% of authorities will need to increase council taxes next spring to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both better provisions and financial savings,” said Vince Maple.
He continued: “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 revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently further found local finances being stretched by the increasing figures of children and older individuals requiring special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Government officials have put off planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (IMD) covering English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” said the report.
“Although only one key city is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of challenges confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
