According to a latest survey of local authorities, English councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and open spaces to support their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a significant number of councils attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and using savings to weather growing fiscal pressures.”
Specific Examples of Proposed Sales
Medway Council in southeast England said its asset disposal plan included the sale of a retail complex in a local town and a social club in another town to generate £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the plan.
Local Levy Increases and Broader Financial Pressures
This research of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of councils will have to increase local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
A survey of regional authorities this week further found council budgets being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is among the top 10 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 municipal officials across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study found.
