Based on a recent poll of local authorities, English councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of public land and land to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of councils seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England said its property management strategy featured the disposal of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Increases and Broader Financial Pressures
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase local levies next April to address the rising cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities recently also found council budgets being strained by the growing number of young people and adults needing special educational assistance.
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 scheduled changes to the Send system until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several 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,” said the study.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The data underscores the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the study found.
