According to a new poll of local authorities, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of playing fields and open spaces to support their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a significant number of councils seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and utilising financial reserves to weather increasing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in southeast England announced its property management strategy featured the disposal of a retail complex in Rainham and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Broader Financial Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise council taxes next April to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will continue to add to the pressures 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 recently further found council budgets being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Gaps
According to the most recent deprivation measures (IMD) for English councils, many participating urban areas were included in the most deprived in the country.
- “Member cities 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 study.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The figures underscores the scale of difficulties facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the study found.