According to a recent survey of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and open spaces to shore up their finances, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
This coalition noted that a significant number of councils attempting to raise money from a quick sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and utilising savings to weather growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in southeast England said its property management strategy included the disposal of a shopping centre in Rainham and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Financial Pressures
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase local levies next spring to cover the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both improved services and financial savings,” stated a council leader.
He continued: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently further found local finances being strained by the growing number of young people and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the Send system until next year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (IMD) for English councils, many participating urban areas were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” said the study.
“Although only a single urban area 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 figures highlights the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and need,” said a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the last year, the survey found.
