Based on a latest survey of local authorities, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and land to support their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of authorities seeking to raise money from a fire sale of holdings marked “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and using financial reserves to manage increasing financial challenges.”
Detailed Cases of Proposed Sales
One local authority in Kent said its asset disposal plan included the sale of a retail complex in a local town and a social club in Rochester to raise 20 million pounds over five years.
- A local golf course and commercial properties 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 Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise council taxes next April to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales 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 some of these require time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently further found council budgets being stretched by the growing number of young people and adults requiring special educational assistance.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those changes has been postponed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (IMD) covering UK local authorities, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The data highlights the scale of challenges confronting local leaders across major urban centers in the next twelve months,” the report added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, 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 last year, the study found.
