According to a new survey of local authorities, English councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in the UK stated that 60% of councils are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of councils seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and utilising savings to manage increasing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in Kent announced its property management strategy included the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Increases and Broader Financial Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next spring to address the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these take time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “We face population challenges which will continue to add to 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 very challenging.”
Countrywide Trends and Forecasts
Research of regional authorities recently also found local finances being stretched by the increasing figures of children and older individuals needing special educational assistance.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the Send system until next year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (IMD) covering English councils, several key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures highlights the scale of challenges facing municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking 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.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the study revealed.
