According to a new survey of local authorities, English councils are planning to sell community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils for major urban areas in England reported that 60% of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and open spaces to shore up their finances, but they contend they must continue to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of councils attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in another town to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Rises and Broader Financial Pressures
This research of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of councils will need to raise local levies next spring to cover the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales 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 creative strategies but some of these require time to achieve both improved services and financial savings,” said a council leader.
He added: “There are population challenges which will continue to add to 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.”
Countrywide Trends and Forecasts
Research of regional authorities recently further found local finances being stretched by the growing number of children and adults needing special educational assistance.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Financial Gaps
Based on the most recent deprivation measures (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and demand,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study found.
