According to a latest study of local authorities, English councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a significant number of councils seeking to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in Kent announced its property management strategy included the disposal of a shopping centre in a local town and a social club in another town to generate £20m over five years.
- A local golf course and business parks held in two English counties, which all generate rent for the authority, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which covers several urban centers, further found that over seven in ten of councils will need to increase local levies next spring to address the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to achieve both better provisions and financial savings,” said a council leader.
He added: “We face population challenges which will continue to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of county councils recently further found local finances being strained by the increasing figures of young people and adults requiring Send support.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the scale of challenges confronting local leaders across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the survey revealed.
