Based on a recent survey of local authorities, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire 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.
This coalition said that a significant number of authorities attempting to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and utilising savings to manage increasing financial challenges.”
Specific Cases of Proposed Sales
One local authority in southeast England announced its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Broader Financial Strains
This research of councils in the coalition, which includes several urban centers, also found that more than 70% of councils will need to increase council taxes next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
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, adult social care, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Projections
A survey of county councils recently also found council budgets being stretched by the growing number of children and older individuals requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (IMD) covering English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of difficulties facing local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study revealed.
