Based on a recent survey of local authorities, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling playing fields and land to support their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of authorities seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in southeast England said its asset disposal plan featured the sale of a retail complex in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Increases and Broader Fiscal Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to raise local levies next spring to cover the growing cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed 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 taking creative strategies but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently further found local finances being stretched by the growing number of young people and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most deprived in England.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of challenges facing municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened care services in the last year, the survey revealed.