According to a new poll of municipal councils, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK stated that six out of ten of local authorities are intending to dispose of properties 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 finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group said that a significant number of councils seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and using savings to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its asset disposal plan featured the sale of a retail complex in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase council taxes next April to address the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are 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 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently also found local finances being strained by the increasing figures of young people and adults requiring Send support.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The figures highlights the scale of difficulties confronting local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study found.
