🔗 Share this article

Based on a new survey of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.

Increasing Financial Challenges Prompt Asset Sales

The Key Cities Group representing second-tier cities in England stated that six out of ten of councils are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.

Local governments have in the past come under fire for selling public land and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.

This coalition said that a high proportion of councils attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and utilising savings to weather increasing financial challenges.”

Detailed Cases of Planned Disposals

Medway Council in Kent announced its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over the next half-decade.

• A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.

Council Tax Rises and Broader Fiscal Pressures

The survey of councils in the key cities group, which includes several urban centers, also found that more than 70% of councils will have to raise council taxes next spring to cover the growing cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.

Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.

“We are taking innovative approaches but certain measures require time to achieve both better provisions and financial savings,” said Vince Maple.

He added: “There are demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”

National Patterns and Projections

Research of county councils this week further found council budgets being stretched by the increasing figures of young people and adults needing special educational assistance.

A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.

Government officials have delayed planned reforms to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.

Disadvantage and Financial Shortfalls

According to the most recent indices of deprivation (IMD) covering English councils, many participating urban areas were included in the most deprived in the country.

• “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” said the study.

“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the scale of challenges confronting municipal officials across key cities in the coming year,” the analysis added.

“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and addresses the actual extent of disadvantage and need,” stated a council leader.

“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their residents.”

One in five of councils have cut or compromised social care provision in the last year, the study found.