Based on a latest poll of municipal councils, English councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities 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 disposing of public land and open spaces to support their finances, 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 generate funds from a quick sale of holdings marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and using financial reserves to manage growing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in southeast England said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase local levies next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead with property disposals after steep rises 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 deliver both improved services and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of county councils recently further found council budgets being stretched by the increasing figures of young people and adults needing Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those reforms has been postponed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the survey revealed.
