Based on a new study of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of local authorities are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling playing fields and land to shore up their budgets, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a significant number of councils seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would prioritise restructuring services and utilising financial reserves to weather growing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in southeast England said its property management strategy featured the sale of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the plan.
Council Tax Rises and Wider Fiscal Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next April to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils this week further found local finances being stretched by the growing number of children and older individuals requiring special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for 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 across the country under the latest IMD measures,” noted the report.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of deprivation and need,” said Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the study found.
