According to a new study of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to support their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of councils seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and using savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent announced its property management strategy included the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Increases and Broader Financial Strains
The survey of councils in the key cities group, which covers several urban centers, further found that over seven in ten of authorities will have to raise council taxes next April to address the rising cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of regional authorities this week also found council budgets being strained by the increasing figures of young people and older individuals requiring Send support.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the most recent deprivation measures (IMD) for English councils, many participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties facing municipal officials across major urban centers in the coming year,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study revealed.
