According to a new survey of municipal councils, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in the UK stated that 60% of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and land to support their finances, but they contend they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of authorities attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and using savings to manage increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in southeast England announced its property management strategy featured the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase council taxes next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to deliver both better provisions and cost efficiency,” stated a council leader.
He added: “We face population challenges which will continue to increase the pressures 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 Trends and Projections
Research of regional authorities this week further found local finances being stretched by the increasing figures of children and adults needing 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 cope with rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of difficulties facing local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the survey revealed.
