According to a latest survey of local authorities, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of councils are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and utilising financial reserves to weather growing financial challenges.”
Specific Cases of Proposed Sales
Medway Council in Kent announced its property management strategy featured the sale of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Broader Financial Pressures
This research of councils in the coalition, which covers several urban centers, further found that more than 70% of authorities will have to raise local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
Research of regional authorities this week further found local finances being stretched by the increasing figures of young people and adults requiring Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to manage rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (IMD) for English councils, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of challenges facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and demand,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey revealed.
