According to a new survey of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and open spaces to support their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of authorities 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 stated they would prioritise restructuring services and utilising financial reserves to weather growing financial challenges.”
Specific Examples of Planned Disposals
One local authority in Kent announced its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Financial Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to raise council taxes next spring to address the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
Research of regional authorities recently also found council budgets being stretched by the increasing figures of children and adults requiring special educational assistance.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the Send system until next year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the extent of challenges facing municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey revealed.
