Based on a latest poll of local authorities, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of local authorities are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling public land and land to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would prioritise restructuring services and utilising savings to weather increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan included the disposal of a retail complex in Rainham and a social club in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Increases and Wider Fiscal Pressures
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both improved services and financial savings,” stated Vince Maple.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of regional authorities recently further found council budgets being stretched by the growing number of young people and adults needing Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of challenges facing municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and need,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study found.
