According to a new poll of local authorities, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling public land and open spaces to shore up their budgets, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
The group said that a high proportion of councils attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and utilising savings to weather growing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent announced its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase local levies next April to address the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority said it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Projections
Research of county councils this week also found local finances being strained by the increasing figures of children and adults requiring Send support.
A network of councils said that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were among the most deprived in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of England. The data highlights the scale of challenges facing local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study revealed.
