Based on a recent poll of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and land to support their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would focus on restructuring services and using savings to weather increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Pressures
The survey of councils in the coalition, which includes several urban centers, further found that more than 70% of authorities will have to increase local levies next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” stated Vince Maple.
He added: “We face population challenges which will persist to increase 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.”
National Trends and Projections
Research of regional authorities recently also found local finances being strained by the growing number of children and older individuals needing Send support.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the scale of challenges facing local leaders across key cities in the next twelve months,” the report 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 disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey found.
