According to a new poll of local authorities, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and land to support their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would prioritise service redesigns and utilising savings to manage growing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in Kent announced its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise council taxes next spring to cover the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of county councils this week further found council budgets being strained by the increasing figures of young people and adults requiring Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of challenges facing local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the survey found.
