According to a new poll of local authorities, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that six out of ten of councils are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and land to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would prioritise restructuring services and using financial reserves to manage growing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in southeast England said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Increases and Broader Financial Pressures
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase local levies next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of regional authorities this week further found local finances being stretched by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (IMD) for UK local authorities, many key cities members were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the extent of challenges facing municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that reflects and addresses the actual extent of disadvantage and demand,” stated a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the last year, the study revealed.
