According to a recent poll of local authorities, English councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of councils are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of public land and land to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group said that a high proportion of authorities seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and using financial reserves to weather growing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in southeast England said its property management strategy featured the sale of a shopping centre in a local town and a community venue in Rochester to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Rises and Wider Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead 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 some of these take time to deliver both improved services and financial savings,” said a council leader.
He added: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of county councils this week further found council budgets being stretched by the growing number of children and adults requiring Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Deprivation and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“Although only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and need,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study found.
