Based on a recent poll of municipal councils, English councils are preparing to sell community centers, sports centres, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in England stated that 60% of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling public land and open spaces to support their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using savings to weather growing financial challenges.”
Specific Cases of Planned Sales
Medway Council in Kent said its property management strategy featured the disposal of a retail complex in a local town and a community venue in another town to raise £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Rises and Broader Financial Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase local levies next April to cover the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils recently further found council budgets being stretched by the increasing figures 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 next year after a white paper setting out those changes was recently delayed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“While only one key city is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges confronting local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study found.
