Based on a latest survey 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 stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of public land and open spaces to support their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of councils seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and using savings to weather growing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent announced its property management strategy included the disposal of a retail complex in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Increases and Wider Financial Pressures
This research of councils in the coalition, which includes several urban centers, further found that more than 70% of councils will need to raise council taxes next spring to address 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 sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
A survey of regional authorities this week also found local finances being stretched by the growing number of children and adults needing Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Funding Gaps
According to the latest deprivation measures (IMD) for English councils, several key cities members were among the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of difficulties facing municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking 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 residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
