According to a recent poll of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of councils attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would prioritise restructuring services and utilising financial reserves to manage growing financial challenges.”
Detailed Cases of Proposed Disposals
Medway Council in southeast England said its property management strategy featured the sale of a retail complex in Rainham and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Rises and Wider Financial Strains
This research of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of authorities will need to increase council taxes next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of regional authorities this week further found local finances being strained by the increasing figures of young people and adults needing special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (IMD) covering English councils, several key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of England. The data highlights the extent of challenges facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
