Based on a recent survey of local authorities, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for selling public land and land to shore up their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using savings to weather increasing financial challenges.”
Specific Examples of Planned Sales
Medway Council in southeast England said its property management strategy featured the sale of a retail complex in a local town and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Increases and Broader Fiscal Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase local levies next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead 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 adopting innovative approaches but some of these require time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, 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 recently further found council budgets being stretched by the growing number of young people and adults requiring Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties facing local leaders across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and need,” stated a council leader.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the survey found.
