Based on a latest study of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of local authorities are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling public land and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would focus on restructuring services and using financial reserves to manage growing fiscal pressures.”
Detailed Examples of Planned Sales
Medway Council in southeast England announced its property management strategy featured the disposal of a retail complex in a local town and a social club in another town to raise £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Rises and Broader Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of councils will need to increase local levies next April to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and financial savings,” said Vince Maple.
He added: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently further found local finances being stretched by the increasing figures of children and adults requiring special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the scale of challenges facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the study found.
