According to a latest study of local authorities, English councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of councils are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a high proportion of authorities attempting to generate funds 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 focus on service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in Kent said its property management strategy featured the disposal of a retail complex in Rainham and a social club in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Local Levy Increases and Broader Financial Strains
This research of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will need to increase council taxes next April to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority 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 temporary accommodation.
“We are taking innovative approaches but some of these require time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “We face population challenges which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found local finances being stretched by the increasing figures of children and adults requiring special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (IMD) for English councils, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of challenges facing municipal officials across key cities in the coming year,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and need,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the survey revealed.
