According to a new study of local authorities, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and land to support their finances, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities seeking to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders stated they would focus on restructuring services and using savings to manage increasing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in southeast England said its property management strategy featured the sale of a retail complex in Rainham and a community venue in another town to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Wider Financial Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to raise local levies next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both improved services and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of regional authorities this week further found council budgets being strained by the increasing figures of children and older individuals needing special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of challenges confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and need,” stated a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
