Based on a new survey of local authorities, English councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and land to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition noted that a significant number of authorities attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and utilising financial reserves to weather increasing financial challenges.”
Specific Examples of Planned Disposals
One local authority in Kent announced its property management strategy featured the disposal of a retail complex in a local town and a social club in another town to raise 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Rises and Broader Financial Pressures
The survey of councils in the coalition, which includes several urban centers, further found that over seven in ten of councils will have to increase council taxes next spring to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and financial savings,” said a council leader.
He continued: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils recently also found local finances being strained by the growing number of children and adults needing special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have delayed scheduled changes to the Send system until next year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is in the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of challenges confronting municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and demand,” stated a council leader.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised care services in the last year, the study found.
