According to a recent survey of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported that six out of ten of local authorities are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and open spaces to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of authorities seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and using savings to weather growing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent announced its property management strategy featured the sale of a retail complex in a local town and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will also be sold under the plan.
Local Levy Rises and Wider Financial Strains
The survey of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will need to raise local levies next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures take time to deliver both improved services and financial savings,” said a council leader.
He continued: “We face demographic pressures which will persist to add to 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.”
National Patterns and Forecasts
Research of county councils this week further found local finances being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (IMD) covering UK local authorities, several participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” said the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and need,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the past 12 months, the study found.
