According to a latest survey of local authorities, English councils are preparing to offload community centers, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to generate funds from a quick sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising savings to weather increasing fiscal pressures.”
Specific Examples of Proposed Sales
Medway Council in Kent announced its property management strategy included the disposal of a shopping centre in Rainham and a social club in Rochester to raise 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Wider Financial Pressures
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise council taxes next spring to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “We face population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of county councils recently further found council budgets being strained by the growing number of young people and older individuals needing 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 manage rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (IMD) for UK local authorities, several participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” said the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study revealed.
