According to a new study of local authorities, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of local authorities are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling public land and land to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities seeking to raise money 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 using savings to weather increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Local Levy Rises and Broader Financial Strains
The survey of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of councils will have to raise local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He added: “We face population challenges which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently further found local finances being strained by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have put off planned reforms to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) 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 place in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of difficulties facing local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, 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 survey found.
