According to a new study of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in England reported that six out of ten of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of playing fields and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to raise money from a fire sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on restructuring services and utilising financial reserves to manage growing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in southeast England said its property management strategy featured the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Rises and Broader Fiscal Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that over seven in ten of authorities will need to increase local levies next spring to cover the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both better provisions and financial savings,” stated Vince Maple.
He continued: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently further found council budgets being stretched by the increasing figures of children and adults needing special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (IMD) for English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The data underscores the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the study found.
