According to a new study of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and open spaces to support their budgets, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of councils 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 said they would prioritise service redesigns and using savings to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in Kent announced its property management strategy included the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Increases and Broader Financial Strains
The survey of councils in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will need to raise local levies next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Projections
Research of regional authorities this week also found local finances being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network projected that local shortfalls 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 Send system until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) covering English councils, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the scale of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities 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 social care provision in the past 12 months, the study revealed.
