According to a new survey of municipal councils, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils representing major urban areas in the UK reported that six out of ten of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to support their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of councils seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using savings to manage increasing financial challenges.”
Detailed Cases of Proposed Sales
Medway Council in Kent announced its property management strategy featured the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Broader Fiscal Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
Medway council said it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both better provisions and financial savings,” stated a council leader.
He added: “There are demographic pressures which will persist to increase 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 very challenging.”
Countrywide Trends and Forecasts
A survey of county councils this week further found council budgets being strained by the growing number of children and adults requiring Send support.
A network of councils said that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with rising needs.
Government officials have put off scheduled changes to the Send system until next year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of challenges facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study found.
