According to a new study of local authorities, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of public land and open spaces to support their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group said that a significant number of authorities seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and using savings to manage increasing fiscal pressures.”
Detailed Cases of Planned Disposals
One local authority in Kent said its asset disposal plan featured the sale 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 two English counties, which all generate rent for the authority, will additionally be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Pressures
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise council taxes next April to address the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority explained 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 temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
Research of county councils recently further found local finances being strained by the growing number of young people and older individuals requiring Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey found.
