According to a new survey of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK reported that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and open spaces to support their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
The group noted that a high proportion of councils attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to manage increasing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in southeast England said its property management strategy included the disposal of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Rises and Broader 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 councils will have to raise council taxes next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both improved services and financial savings,” said a council leader.
He added: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of regional authorities recently further found council budgets being strained by the increasing figures of young people and older individuals needing Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most deprived in England.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.
