Based on a new poll of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and land to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of councils seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Planned Sales
Medway Council in Kent said its property management strategy featured the disposal of a shopping centre in a local town and a community venue in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Rises and Broader Financial Strains
This research of councils in the coalition, which covers several urban centers, further found that over seven in ten of councils will need to raise council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will persist 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 extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities recently further found council budgets being stretched by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of challenges facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study revealed.
