Based on a new poll of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of councils are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and land to support their finances, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of councils 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 growing fiscal pressures.”
Detailed Cases of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Local Levy Rises and Broader Fiscal Pressures
The survey of councils in the coalition, which covers several urban centers, further found that more than 70% of authorities will need to raise local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these take time to achieve both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities recently also found local finances being strained by the growing number of children and older individuals needing Send support.
A network of councils said that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of challenges facing local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and need,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.