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 Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and open spaces to support their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and using savings to manage increasing fiscal pressures.”
Specific Cases of Planned Disposals
One local authority in Kent announced its asset disposal plan included the sale of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next April to cover the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after sharp increases 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 take time to achieve both improved services and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities recently also found council budgets being stretched by the increasing figures of young people and older individuals needing Send support.
A network of councils said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the Send system until next year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of challenges facing municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and demand,” stated a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study found.
