According to a latest survey of municipal councils, English councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and land to support their finances, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of authorities seeking to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and utilising financial reserves to weather increasing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in southeast England said its property management strategy featured the sale of a shopping centre in Rainham and a social club in another town 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 Medway council, will also be disposed of under the strategy.
Council Tax Increases and Wider Financial Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed 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 innovative approaches but some of these take time to achieve both improved services and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils recently also found council budgets being strained by the increasing figures of young people and older individuals needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a white paper outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the most recent deprivation measures (IMD) for UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
