Based on a new poll of municipal councils, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
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 intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and land to support their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of councils attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in Kent said its property management strategy included the sale of a retail complex in Rainham and a social club in another town to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next spring to address the rising cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council 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 taking innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will persist 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.”
National Patterns and Projections
Research of regional authorities this week further found local finances being stretched by the growing number of young people and adults needing Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most deprived in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of England. The figures underscores the extent of difficulties facing local leaders across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the study revealed.
