According to a recent poll of local authorities, English councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of councils are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to support their budgets, but they contend 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 fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and using financial reserves to manage growing financial challenges.”
Specific Examples of Planned Disposals
One local authority in Kent said its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Increases and Broader Financial Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these take time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “There are population challenges which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of county councils recently further found local finances being strained by the increasing figures of young people and adults needing special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (IMD) covering English councils, many participating urban areas were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the scale of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
