According to a recent survey of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of councils are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and land to support their finances, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and using savings to manage growing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in Kent announced its property management strategy featured the sale of a retail complex in Rainham and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be sold under the plan.
Council Tax Rises and Wider Fiscal Strains
This research of councils in the coalition, which includes several urban centers, further found that over seven in ten of authorities will need to raise council taxes next April to address the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils 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 struggle to cope with rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the scale of challenges facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and need,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
