According to a recent study of local authorities, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling public land and open spaces to support their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and utilising savings to manage increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in southeast England said its property management strategy featured the disposal of a retail complex in a local town and a social club in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Increases and Wider Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise council taxes next April to cover the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both improved services and financial savings,” said Vince Maple.
He added: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently also found local finances being stretched by the increasing figures of children and adults needing Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most deprived in England.
- “Member cities like several major towns place in the top 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the extent of challenges facing local leaders across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study revealed.
