Based on a latest study of local authorities, English councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition noted that a high proportion of authorities attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and using savings to manage increasing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent announced its property management strategy included the sale of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Wider Fiscal Strains
This research 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 need to raise council taxes next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
Research of county councils this week also found council budgets being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent deprivation measures (IMD) for UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of difficulties confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
