According to a new survey of local authorities, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling playing fields and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and utilising savings to manage growing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in Kent announced its asset disposal plan included the disposal of a retail complex in Rainham and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Rises and Wider Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of authorities will have to raise local levies next spring to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both improved services and financial savings,” stated a council leader.
He continued: “We face population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Projections
Research of regional authorities this week further found council budgets being stretched by the increasing figures of young people and older individuals needing Send support.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have delayed planned reforms 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 latest indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the scale of difficulties facing local leaders across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey revealed.
