Based on a recent poll of local authorities, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of councils are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and using savings to manage growing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a retail complex in a local town and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Council Tax Increases and Broader Fiscal Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to deliver both improved services and financial savings,” stated a council leader.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of regional authorities recently further found local finances being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (IMD) for UK local authorities, several key cities members were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” noted the study.
“While 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 the nation. The figures underscores the scale of difficulties confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
