According to a new poll of local authorities, English councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of public land and land to support their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of authorities seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and using financial reserves to weather increasing fiscal pressures.”
Specific Cases of Planned Disposals
One local authority in Kent said its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead 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 achieve both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
A survey of county councils this week further found local finances being stretched by the increasing figures of young people and adults needing Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the report.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey found.
