Based on a latest study of local authorities, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and open spaces to support 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 authorities seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using savings to manage growing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in Kent said its property management strategy included the disposal of a shopping centre in a local town and a social club in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase council taxes next April to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of regional authorities recently further found council budgets being stretched by the increasing figures of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Government officials have put off planned reforms to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (IMD) covering UK local authorities, several key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton 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 deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised care services in the last year, the study found.
