According to a new study of local authorities, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of councils are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and land to shore up their budgets, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to generate funds 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 prioritise restructuring services and using savings to weather increasing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in Kent announced its property management strategy featured the disposal of a retail complex in a local town and a social club 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 disposed of under the plan.
Council Tax Increases and Broader Financial Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase local levies next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “There are population challenges which will continue to add to the pressures 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 Patterns and Forecasts
A survey of county councils recently further found council budgets being strained by the growing number of young people and adults needing special educational assistance.
A network of councils projected that council deficits will hit 4.4 billion pounds 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 reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of challenges facing local leaders across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and need,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the last year, the study found.
