Based on a new poll of municipal councils, English councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of authorities seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and using financial reserves to weather increasing fiscal pressures.”
Specific Cases of Planned Disposals
One local authority in southeast England announced its property management strategy featured the sale of a shopping centre in Rainham and a community venue in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Strains
This research of councils in the key cities group, which includes several urban centers, also found that over seven in ten of councils will need to raise council taxes next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these take time to achieve both improved services and financial savings,” stated a council leader.
He continued: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
A survey of county councils recently also found council budgets being stretched by the growing number of children and older individuals requiring Send support.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (IMD) covering English councils, several key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of England. The data highlights the extent of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey found.
