Based on a new study of local authorities, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of authorities attempting to raise money from a quick sale of assets marked “a distinct shift 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.”
Specific Examples of Planned Sales
One local authority in southeast England announced its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Rises and Wider Fiscal Strains
The survey of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of councils will need to raise council taxes next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of county councils recently further found local finances being stretched by the growing number of children and older individuals requiring Send support.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have put off scheduled changes to the Send system until next year after a policy document outlining those changes has been postponed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The data highlights the scale of challenges facing local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study found.
