According to a recent study of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of properties to stabilize finances.
Growing Financial Pressures Prompt 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 cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and land to support their budgets, but they contend they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a high proportion of authorities attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Planned Sales
Medway Council in southeast England announced its asset disposal plan included the sale of a retail complex in Rainham and a social club in another town to raise 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities 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 April to cover the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently further found local finances being stretched by the increasing figures of children and older individuals needing Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Gaps
Based on the latest deprivation measures (IMD) covering English councils, several key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” said the study.
“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 England. The data underscores the extent of difficulties confronting local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and need,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised social care provision in the last year, the survey found.
