According to a latest survey of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling public land and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and using financial reserves to manage increasing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Broader Financial Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise local levies next April to address the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently further found council budgets being stretched by the growing number of children and older individuals 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 increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the most recent deprivation measures (IMD) covering English councils, many participating urban areas were among the most deprived in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The data underscores the scale of challenges facing local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the last year, the study found.
