🔗 Share this article

According to a latest study 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 balance the books.

Increasing Fiscal Pressures Prompt Asset Sales

The Key Cities Group representing second-tier cities in the UK stated that 60% of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.

Local governments have previously faced criticism for selling public land and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.

The group noted that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using financial reserves to weather growing financial challenges.”

Specific Examples of Planned Sales

One local authority in Kent announced its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in Rochester to raise 20 million pounds over the next half-decade.

• A local golf course and business parks held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.

Council Tax Rises and Broader Financial Pressures

This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise local levies next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.

Medway council said it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.

“We are taking creative strategies but some of these take time to achieve both better provisions and cost efficiency,” stated a council leader.

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

Countrywide Patterns and Projections

A survey of regional authorities recently further found local finances being stretched by the growing number of young people and adults requiring special educational assistance.

A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.

Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.

Disadvantage and Funding Gaps

Based on the latest deprivation measures (IMD) for UK local authorities, many participating urban areas were among the most deprived in England.

• “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.

“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the analysis concluded.

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

“Without this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”

One in five of councils have cut or compromised care services in the past 12 months, the study found.