Based on a new survey of local authorities, English councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of authorities seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Cases of Proposed Disposals
Medway Council in southeast England announced its property management strategy included the disposal of a retail complex in Rainham and a community venue in Rochester to raise £20m 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 strategy.
Council Tax Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which includes several urban centers, also found that more than 70% of authorities will have to raise local levies next spring to address the growing cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
Medway council said 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 adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He added: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of county councils this week also found local finances being stretched by the increasing figures of children and older individuals needing special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (IMD) 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 place in the top 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the extent of challenges facing municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been explicit about the need for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study found.