Based on a new survey of local authorities, English councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of councils are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to support their finances, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
The group noted that a significant number of authorities attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Detailed Cases of Planned Disposals
Medway Council in southeast England said its property management strategy featured the sale of a retail complex in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Broader Financial Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase local levies next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities recently also found council budgets being stretched by the growing number of children and older individuals requiring Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The data underscores the scale of difficulties facing local leaders across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey revealed.
