Based on a recent poll of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in England stated that 60% of local authorities are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and using savings to manage growing financial challenges.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in Rochester to generate 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Increases and Broader Fiscal Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority 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 deliver both improved services and cost efficiency,” said a council leader.
He continued: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils this week further found council budgets being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those changes has been postponed.
Deprivation and Financial Gaps
According to the latest deprivation measures (IMD) covering English councils, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” said the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis added.
“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, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the study found.
