Based on a latest poll of local authorities, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and using savings to weather growing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in Kent announced its asset disposal plan featured the sale of a retail complex in a local town and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will also be sold under the plan.
Council Tax Rises and Wider Financial Strains
The survey of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of authorities will need to increase local levies next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said 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 taking creative strategies but certain measures require time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
A survey of county councils recently also found council budgets being stretched by the increasing figures of children and older individuals needing special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the past 12 months, the survey found.
