Based on a new study of local authorities, English councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of local authorities are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling playing fields and land to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of councils seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and utilising savings to manage growing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in Kent said its property management strategy featured the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Increases and Wider Fiscal Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase council taxes next April to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” stated Vince Maple.
He added: “We face population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Projections
A survey of regional authorities this week also found local finances being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (IMD) for English councils, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the scale of difficulties facing local leaders across key cities in the coming year,” the report added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and need,” said a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study found.
