According to a new study of local authorities, English councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of councils are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and land to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and using savings to manage increasing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its property management strategy included the sale of a retail complex in a local town and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Increases and Broader Fiscal Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise local levies next April to cover the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will proceed 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 adopting innovative approaches but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “We face population challenges which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils recently also found local finances being strained by the growing number of young people and adults requiring special educational assistance.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the extent of difficulties confronting municipal officials across key cities in the coming year,” the report added.
“Council officials have been clear about the need for a equitable and lasting funding system that reflects and responds to the real levels of disadvantage and need,” said a council leader.
“Without this, councils will continue 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 cut or compromised social care provision in the last year, the study found.
